I don't think it's alive, I think it's talking to its self. They're making a Chinese whisper machine, and it will remain so until it has embodiment, subjective and changing goals, and a will of it's own.
That's part of intelligence, but it's still a reverse engineering take on things.
In actuality we have intelligence because our threat detection and social protection/survival goals became abstract enough for self-awareness to occur.
EDIT: Telephone game is what I meant.