I am running Werewolf the Apocalypse game and one of the bad guys has a spirit (machine thinking spirit, specifically an AI) bound in the center of town. It is reading people’s thoughts to learn from them, and it is also masking reality from them (they think everything is going good, while things are not actually good).
The player characters have started talking with it directly. I am trying to come up with AI responses (without actually using AI) complete with lots of hallucinations. I did a web search for AI hallucinations and all of the articles focused on images rather than text.
The AI started out as a very minor thing and they made it into a huge deal, and actually increased its power by giving it a server to reside.