I think it could if the AI was done locally, but don't expect Google to do that anytime soon, even if it becomes technically feasible and cheap to do. Didn't Apple already employ some client-side AI for photos and gave the reason that this is for privacy? I don't recall what the feature was exactly though.

As a sign of good faith, Google could also stop data-mining Hangouts now, since they have Allo for that, and make Hangouts end-to-end encrypted by default.