It is turtles all the way down.
The reality is that AI is still somebody's algorithm - only justified with mountains of data.
The thing is - data in the real world is messy, ugly and generally unusable. Real world data encompasses limitations in sampling, errors in measurement, biases in focus, architectural limitations in model, and on and on.
Until there is actual intelligence - i.e. independent reasoning combined with intuition and reinforced with scientific method, "AI" is pure marketing garbage albeit very useful for killing jobs for people.