This doesn't just require understanding pronouns and antecedents. It also requires understanding what the nouns actually designate, in terms of their qualities with respect to each other, what "fit" actually describes in the relationship between the two things.>Current AI is very flaky at this.
From my understanding it doesn't do it at all and can only occasionally imitate it passably out of luck and because people tend not to intentionally throw curveballs. The chatbot AI we have now isn't even supposed to be able to do this, either. The way people are asking it questions to get real
answers fundamentally misunderstands the problems it's designed to solve. At the same time, the way people are trying to use the chatbots does show that they are
succeeding at what they are supposed to do, which is produce text that looks like something a human would produce. The problem here isn't that the AI sucks, but that people misunderstand what tool they're using and aren't trying to verify or fact check things.