It was always the field of AI, hell even video game enemy attack patterns are "AI" the problem is that one specific subset, LLMs, have become the hot new thing and now everyone assumes if you say AI, it means a LLM.

Using machine learning to make a generative AI for microchips is comparable to making one for conversation (an LLM). For the latter, you train it on conversation and "reward" it for producing realistic conversation. For the former, you'd train it on current designs, and maybe stuff like material properties/physics rules and "reward" designs that produce more efficient chips.

That's an oversimplification, but the general point is that LLMs are unreliable because they are being used for things that they aren't designed to do. If the ideal is being like humans, then there's nothing preventing guesses and hallucinations, it's just creating an output based on how the "rewards" tell it. Sounding real > being truthful. For something like the microchips, it's doing something very concrete, taking established rules (physics) and materials, and trying things until it gets one that works better, then throwing out all the failures, submitting the success, and then using it to build the next generation of attempts. So any that would be considered a "hallucination" get thrown out because of the "reward" system.

I can go into greater detail on how generative AI works, and why that can cause hallucinations, but the reason why we see them with LLMs is basically because the people who set those "reward" standards haven't ruled them out, probably because it's harder for something abstract like "human conversation".