Re: A minor flaw in all this
I thought all AI so far was a flop so far
You thought wrong. AI technology has been hugely successful, and profitable, in many industries. Natural Language Processing alone is a major software segment, covering things like advanced indexing and retrieval, sentiment analysis, automated translation, voice recognition, etc.
Facebook and Googles weak AI ... all are built on the assumption that humans can be modelled in reductionist materialist terms
Wrong again. So-called "weak" AI is specifically that part of AI research that doesn't aim to create a sentient machine.
For that matter, even strong AI doesn't necessarily aim to model, or reproduce, human cognition; or when it does aim for human-like cognition, doesn't necessarily claim that human cognition per se is mechanical; or when it is predicated on the thesis that cognition is mechanical, it does not necessarily assume that - there are quite a few complex arguments supporting that thesis.1
This is one of the reasons why many researchers working in machine learning stay away from the AI label - people who know little or nothing of the subject love to pronounce on it.
And, incidentally, anyone working on strong AI, or even weak-AI projects that aim to predict human behavior, is aware that people don't always do what a model expects. That's kind of, y'know, axiomatic. Even economics has finally seen the light on that one (with the burgeoning field of behavioral economics).
1For example, John Searle, of "Chinese Room" fame, is often cited as arguing against the possibility of AI, but in fact he explicitly stated that he believed thinking is a mechanical process and strong AI is possible. He just thought a certain class of approach ("symbolic manipulation") couldn't accomplish it.