The reason this occurs as a narrative is because hallucination is a widespread issue with LLMs, and thus can be fairly generalised across most deployments of them.
Talking to some disconnected sets of people who are much more layman and not computer users, when I speak of some cool new AI app, they look at me with eyes of perversion and somewhat disgust with fear.
The way the information has been coming out and sold of ai to pump up stock prices is to the detriment of public opinion. Curious to see how things go.