was it using AI? or was it just some engineer talking into a microphone and interpreting the words.

I wasn't terribly impressed to be honest.. I agree Disney has done a much better job, and I imagine Industrial Light and Magic just look at it and laugh at how primitive it is.

"He's my best friend, best of all best friends
Do you have a best friend too
It tickles in my tummy
He's so Yummy Yummy
Hey you should get a best friend too" - Toy Box