AI or Artificial Intelligence in the broader sense is the intelligence of machines and the branch of computer science that tries to create it.

As pertaining to FlightGear it is the use of code to create an interaction between the pilots and the program in order to create a more realistic experience.

A prime example of these AI Systems is AI Air traffic control which attempts (and succeeds to a certain extent) to simulate Airport tower communications with the pilots.

Another example would be Interactive Traffic that creates automated air traffic around certain areas using .xml files.

Ground Traffic Simulation Resources for vehicules such as cars, trucks, trains, and even boats and ships are also controlled through AI.