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Thankfully the AI use is very tame so far, used for stuff like offline alt text generation and offline translation. I’m personally still concerned about copyrights and ethics of the models used, but at least it’s directed towards providing specific features, not a magic cure-all.
If the quote is accurate, he went a step further and put pirated games on the devices. Even if pirating the game is legal in some way (he owns it legitimately so putting a copy is fine or something), sending such devices out to customers then means he’s also distributing pirated games.
That said, somebody in the comments claimed he didn’t distribute games, but rather software that made it easy to pirate games - I don’t know what the precedent is for that being considered illegal, but it does call the original claims into question.