While this is a technically correct term, I think the use of GM offspring is the preferred specification since they are not (yet) completely artificial. In contrast, current AI is completely of human manufacture. Aside from the fact that current GM babies are rather limited to gene therapy, which does not enter the genome, and to offspring that most people would not call babies.
Just because a term makes you uncomfortable does not make it incorrect. You are trying to force two classifications under a single broad term when they in fact have very little in common. What we refer to as artificial intelligence has no more in common with human or animal intelligence than the fact that it is a decision making process. The similarities end there. It is not self aware on any level whatsoever. It is ONLY an algorithm that models optimal behavior. Current and forseeable methods of AI have absolutely no potential to achieve conciousness by any but the broadest and most useless definition.