"Applied Statistics" is very clearly a contemporary, resentful, name for "Artificial Intelligence", chosen by Chiang out of what - shame? a desire for lost purity? - *because* it's not "sexy". It is not because it is the name an insightful 1950s researcher would have chosen.
This Puritan sexlessness is the choice of a *decent* person in a Neovictorian age, and in that connection I am reminded of this passage from The Diamond Age:
Hackworth had given him his social card, which was appropriate under these circumstances but revealed nothing else.
"Oh, really. I'd thought anyone who could recognise Wordsworth must be one of those artsy sorts in P.R."
"Not in this case, sir. I'm an engineer. Just promoted to Bespoke recently. Did some work on this project, as it happens."
"Oh, P.I. stuff mostly," Hackworth said. Supposedly Finkle-McGraw still kept up with things and would recognize the abbreviation for pseudo-intelligence, and perhaps even appreciate that Hackworth had made this assumption.
Finkle-McGraw brightened a bit. "You know, when I was a lad they called it A.I. Artificial intelligence."
Hackworth allowed himself a tight, narrow, and brief smile. "Well, there's something to be said for cheekiness, I suppose."
This is a dialogue between Hackworth, a thoroughly *decent* Neovictorian gentleman, thoroughly dyed and steeped in the ethos of his time as only an engineer can be, and Finkle-McGraw, an aristocratic almost-relic of the pre-Neovictorian age, whose work helped to bring about the Neovictorian "Diamond Age" in which he enjoys his lordship, but whose ambivalence about having done so fuels the plot, which I won't get into here, but is certainly relevant.
Chiang is evidently trying to be "decent" above all, and his objections are quasi-timeless enough to be identically those of the narrative voice of Stephenson in 1995 -- writing during the last AI Winter before the statistical turn -- what is important are decent relations between people, especially *not* viewing people as simply bags of parameters to twiddle, *especially* especially children. In some sense, shared by both Stephenson and Chiang, there is a special spark definitely absent from any machine, whatever the principle of its construction.
Which is why Chiang's choice of euphemism stands out so strongly to me. Those enthusiastic 20th century engineers were not simply trying to work out consequences of statistics -- "applied statistics" as a field already existed and was more general than "artificial intelligence". Statistics hasn't even been central to AI work until quite recently, so "precise" is exactly what "Applied Statistics" as a euphemism for "Artificial Intelligence" is not, even if it feels, in some moral sense, more accurate.
Yudkowsky's youthful enthusiasm of inventing a True Will program was him picking up correctly on the mood of those midcentury workers -- they were going to make artificial intelligences and they were going to do it within a few years. It's a prudish Victorian who looks back at this and instead of laughing, feels ashamed, tries to walk backwards into the tent of his ancestors and throw so anachronistic a sheet over their innocence.