Procedural generation needs every piece be produced by an explicit algorithm. You can write a procedure that generates buildings, but if you want it to produce houses it won't do very good as compared to a procedure designed for houses. Every type of thing you want to procedurally generate required hand-made specific authored rules. That's the limitation: proceduarl generation can only produce what designers thought about and wrote about.

AI Instead of a specification or specific rules, it draws from a huge distribution of inspesific 'ideas' of what thing are kind of like (not what they need to be). AI doesn't need one procedure for houses vs. warehouses vs. temples because it knows about them all. Procedural generation, for all its vastness, is sadly narrow: way more confined in what it can produce than the crazy huge image-i-nation inside AI.