Why does AI looks so real but CGI doesnt?

I just saw a horror reel on Instagram and it was AI. It looked so realistic i thought it was a practical effect or a puppet. How can AI make monsters look so real and lifelike, but Hollywood, with their billions and billions of dollars, can't figure it out. ChatGPT figured it out in 3 years. We haven't been able to achieve that level of realism in 30?

Why is that? What does AI do differently?