Draw up the product roadmap such that you can claim maximum AI-ness while including as little of it as possible in the actual product. Sounds like the CEO doesn't have any technical objections to not using AI, he just wants the ability to raise on AI branding.

Include as much non-AI work as you can in the AI teams' projects, pitch an "AI efficiency initiative" that minimizes new spend on AI with the justification of other teams picking up the slack, talk up whatever ML you're already doing, etc.