They certainly are. However, they struggle with making those responses consistent with reality -- even a fictional reality. An AI can whip up an answer to what happens when a player hires some toughs at a bar to stage a fight... but it won't be nearly as good at taking into consideration that the bar belongs to a crime lord who is now angry at the PCs for dragging his boys into their affairs.New AIs don't need scripted responses. They are perfectly capable of improvising.
They also have a blind spot the size of a house when presented with prompts based on flawed premises... like a player acting on imperfect information.