We mentioned it here two weeks ago but today it’s apparently finally rolling out to Pixel 8 phones.
Google’s promo video: https://www.youtube.com/watch?v=WdbeqSQjZI8
It’s also available on the Samsung Galaxy S24, but I guess folks with a Pixel 7 and below will have to wait.
Probably because it likely uses object recognition with some neural network on what you circled? But yes, anything involving neural networks will get the marketing label “AI”.