A better word for hallucations is really bullshit, which differs from a more straightforward falsehood because the speaker is blithely unconcerned about truth.
It's not so much that these AI tools are grounded in reality or hallucating, telling the truth or misinformation, as much as they sound authoritiave when they do it.
Frankfurt proceeds by exploring how bullshit and the related concept of humbug are distinct from lying. He argues that bullshitters misrepresent themselves to their audience not as liars do, that is, by deliberately making false claims about what is true. In fact, bullshit need not be untrue at all. Rather, bullshitters seek to convey a certain impression of themselves without being concerned about whether anything at all is true.
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