alt Hacker NewsConfabulation is also a symptom very prevalent in forms of narcissism and psychopathy. Gaps in understanding or perception are back-filled by confabulating so as to not risk the omnipotence of the confabulator.
Up to the reader to decide whether this phenomenon is found in the statements of AI leadership or not.
It's also something people tend to do when thinking, daydreaming, trying to solve problems, etc. We just usually don't fall for our own bullshit.
LLMs don't either. They just give output in response to input. If the output is wrong that's because the model is wrong, not because the LLM is doing anything it's not supposed to be. It just wasn't built well enough to produce the expected result.