Because that's what intelligence is. There's a very funny video floating around of a squirrel repeatedly trying to bury an acorn in a dog's fur and completely failing to understand why it's not working. Now sure, a squirrel is not the smartest animal in the world, but it does have some intelligence, and yet there it is just mindlessly reproducing a pattern in the wrong context. Maybe you're thinking that humans aren't like that, that we make decisions by actually think through our actions and their consequences instead of just repeating learned patterns. I put it to you that if that were the case, we wouldn't still be dealing with the same problems that have been plaguing us for millennia.

Machine Learning is such a better name. It describes what is happening - a machine is learning to do some specific thing. In this case to take text and output pictures... It's limited by what it learned from. It learned from arrays of numbers representing colours of pixels, and from strings of text. It doesn't know what that text means, it just knows how to translate it into arrays of numbers... There is no intelligence, only limited learning.

Honestly I think it's marketing ai sells better then machine learning programs

Because it is intelligent enough to find and reproduce patters. Kind of like humans.

But it is artificial.

I guess the same reason why smartphones are called "smart" phones.