I have no idea how to deal with people like that, when someone has thoroughly internalized unfounded assumptions about what ML is, how it works, and where it's headed based on the current tech... what do you say? How do you broach the topic that they might be so deep in a hype cycle that they've genuinely lost touch?

I've tried, gently, firmly, obliquely... nothing seems to work. I had the same experiences during the Crypto bubble, people simply wouldn't listen to dissent from the notion that we were on the cusp of changing money, programming, and society. How do you explain to someone that just because they can imagine an exponential graph doesn't mean the data fits?