Well, Milo certainly doesn't work, or they wouldn't have needed to show an increasingly-blatantly prerecorded demo faked up to look like it wasn't prerecorded. Of course we have some of the AI tech. I am always very interested in the yearly turing test competitions...
What we don't have are good common-sense everyday-life bots that can act convincingly. The Turing test entries still cop out half the time and refuse to answer your questions precisely, but they do so in a human way--but you can't dodge questions forever. Although Milo didn't say very much that they couldn't have done, he just wouldn't be interesting for very long. Milo is supposed to show interest in the user's life, but that requires a lot of learning...conversation and introductions start out very formal with very little assumed information, but as formality decreases, assumed information and references become way more common and that's hard to deal with. And learning, itself, is so very tricky. For example. Milo asks "What did you do today?" You say "Oh, I wrote a story." What's Milo going to say? If he doesn't even ask what it's about, then he isn't very interested. If he asks what it's about and you say "Oh it's about a dragon" and he just says "That's nice", then he isn't very interested. Really showing interest would mean asking "Is the dragon a good guy or a bad guy?" or something, and that takes a LOT of understanding and common sense to know enough to even ask! I can't even guess on a timetable for having that, but I'd put it ten years from now at the very earliest that it would be seem remotely creative and understanding when you interact with it, and even then only on very very limited subjects--it would be an AI specifically designed to understand fantasy literature at a very basic level, for example, that might be able to grasp the concept of some of the Little Golden Books and not apply that knowledge outside in any way.
I haven't seen many AIs yet that pretend to have an ongoing life outside of interacting with people. That sounds fun to work on. Again, the chatbot entries usually just have to respond to like 25 statements and then the round ends. Milo clearly has some kind of homework that he's supposed to be doing, enough to provide context from the last few days at least, which is nice.
We don't have good enough image recognition. I keep close tabs on the state of the art, there. The database of past experience is not anywhere near good enough. We're very lucky to get 70% accuracy in clear and simple photographs, and that's for recognizing things like "the sky", "a road", "a tree". Tech to recognize written numbers and letters with human-level accuracy is moderately recent (but has enormous commercial uses), and that has no creative elements whatsoever. You'd need an enormous common-sense library to make it recognize all the symbolic representations that people draw--the way Western society draws a symbol of a fish is probably very different from other cultures, even--and it would be a huge stretch to take 'recognize a written numeral' and turn that into 'recognize something from this symbol library where each symbol can be even more different from the baseline'. Five years before we can recognize a small library of drawn symbols like fishes and mammals and cars and people with 50% accuracy. Thirty years and a major worldwide community 'common sense' symbol recognition contribution project before it's viable on a wide range of stuff.
I just don't see how this could stay interesting for very long if you try to have a real conversation. It'd be like having a game set in a really deep and pretty forest, except there's invisible walls on either side of the path so you can't take a closer look.
Besides, if I had random AI kid to talk to, I would push that AI's creativity to the limit. Within the first ten minutes I'd be trying to get him to give me ideas to continue writing a story, I'd be asking him personal beliefs in philosophy and trying to change them, I'd be trying to teach him how to play Tic-Tac-Toe (or some variant that he's not preprogrammed with, like...a 4x3 board), and trying to tutor him in math--and if he was preprogrammed, I'd keep raising the level to calculus and beyond. And then, discovering that none of those things work, I'd get bored and leave.