I'm not sure I'd say "AI doesn't work" anymore. It definitely doesn't "work" to the degree that the loudest boosters will claim it does. But like, I do think it's recently crossed a threshold where it can be a useful tool in the right hands.
Which I personally find very annoying since I too have moral qualms about the broader AI industry. E.g. the point about surveillance you're making I think is an important one.