Originally, Warp was doing just that. Reimagining the terminal including making AI a part of it. I don't think they really found much purchase there because they ended up needing to make a platform out of it:

https://www.warp.dev/

Yeah terminal window is a bit of a different story, though. I mean the actual shell binary.

With some ... intensive ... security/sandboxing/containerizing of some kind though, I guess.