“Stories are real,” insists David, the enchanted robot child who is the protagonist of Steven Spielberg's A.I.: Artificial Intelligence. David believes that fairytales can come true. Do we? Spielberg the humanist historian is in remission; Steven the regressive mystic has returned, with a vengeance.

An occasionally spectacular, fascinatingly schizoid, frequently ridiculous and never less than heartfelt mishmash of Pinocchio and Oedipus, Stanley Kubrick (who bequeathed Spielberg the project) and Creation of the Humanoids, Frankenstein and ‘The Steadfast Tin Soldier’, A.I. is less a movie than a seething psychological bonanza. None of the year's Hollywood releases has given US critics more to write about—nor is one likely to. Moreover, given the movie's convoluted provenance and charged subject matter, it's not so much the critic as their inner child who has been responding to Spielberg's provocation.

Opening in the US in late June, A.I. reaped a severely mixed crop of reviews—surely the most varied in its maker's career. New York Times critic A. O. Scott hailed A.I. as Spielberg's “best fairytale”, as well as “a more profound inquiry into the moral scandal of dehumanization than either Schindler's List or Amistad.” Writing in the New Yorker, David Denby termed A.I. a movie that “weirdly pours treacle over a foundation of despair … a ponderous, death-of-the-world fantasy.” Adding to the mix have been reports in the trade papers and elsewhere recounting the violent antipathy ordinary audiences have expressed. This disapproval was manifest at the box office where A.I.'s grosses dropped 50 per cent and 63 per cent in its second and third weeks. A.I. is not the first Spielberg film to be perceived as a flop; it is, however, the first to be more a critical than a commercial success—which is to say, an art film.

If there is a universal personality in contemporary cinema it is surely Steven Spielberg. His movies have ranged from the depths of the ocean to the dark side of Neverland, from the Georgia backwoods to Japanese-occupied Shanghai. Spielberg has brought extraterrestrials down to earth and resurrected the dinosaurs. His sacred texts include not only the Ark of the Covenant but A Guy Named Joe (1944). As Walt Disney's invented signature used to emblazon the landscape in the comic books and comic strips produced by his enterprise, so Spielberg has managed to affix his name to the Holocaust, slavery and the European theatre of World War II. In that tradition of aesthetic big-game hunting, he appropriates Stanley Kubrick.

A.I. is adapted from sci-fi writer Brian Aldiss' ‘Super-Toys Last All Summer Long’, a story first published 32 years ago in Harper's Bazaar. Kubrick, who evidently had a long-standing interest in this tale of an artificial child and his human parents, acquired the rights in 1983. Various accounts suggest he was already operating in reaction to Spielberg. Inspired to make A.I. by the success of E.T. (1982), Kubrick is said to have abandoned the project after he saw the digital effects of Jurassic Park (1993). Afraid that by the time he could finish A.I. its special effects would be obsolete, he proposed to produce the movie for Spielberg to direct. According to Spielberg, he and Kubrick consequently enjoyed a long-term phone relationship complete with a top-secret fax line dedicated to A.I. Having inherited the project, Spielberg worked from the 90-page treatment Ian Watson had prepared for Kubrick, as well as 600 drawings made by comic-book illustrator Chris “Fangorn” Baker.

A.I. appears then as a curiously hybrid work. One could begin by parsing the title: does the artifice belong to Spielberg and the intelligence to Kubrick? Or is it vice versa? A.I. has an unnecessarily complicated yet brazenly irrational premise. The script, for which Spielberg has taken sole credit, more than once becomes bogged down in a hilarious morass of Ed Wood gibberish in trying to elucidate the pseudo-scientific principles by which robots might be imbued with the capacity to love and to dream—to have an unconscious—or the special circumstances under which human beings can be cloned. Why bother? The movie's appeal is not to reason. Its psychological terrain is far closer to the magical realms of Hans Christian Andersen or E. T. A. Hoffman than to sci-fi as we know it.

Spielberg's first exercise in cine-futurism, A.I. is set in a vaguely established, remarkably homogenous, bizarrely suburban, post-greenhouse-effect world of strict family planning and robot sex slaves. These humanoids are known as “mechas”, and A.I. opens with their benign designer Professor Hobby (William Hurt) informing his devoted band of earth-tone imagineers that he has developed something new, “a robot child with a love that will never end.” One associate makes an obscure moral objection, but the good professor silences her with an airy wave of the hand: “Didn't God create Adam to love him?” Yes, of course, and look what happened.

The proto robo-tot will be given to distraught Monica (Frances O'Connor), whose own terminally ill son Martin has been cryogenically frozen pending the discovery of a cure for his disease. The artificial miracle child first appears out of focus, to suggest the elongated embryos who redeemed the world in Close Encounters of the Third Kind (1977). Is little David (Haley Joel Osment, scarcely less uncanny here than in The Sixth Sense) the baby Spielberg, a holy child with a smooth, open face and limpid blue eyes? Certainly Spielberg's identification with David will seem absolute. Is he a sort of emotional prosthetic device, the Frankenstein's monster of love? Or is this adorable robot child a terrifying metaphor for us all? The acid-ripped runaways and hippies of the Manson Family used to have a mocking chant about the parents they had fled: “I am a mechanical boy … I am my mother's toy.”

A.I.'s early scenes are exquisitely creepy—perhaps more so than intended. Perpetually smiling and always underfoot, David frisks around Monica like an annoyingly needy pet—even bursting in on her as she demurely perches on the toilet. A psychoanalyst might make something of that scene but it is soon superseded. Once Monica pronounces the magic spell that will eternally bond David to her alone (not, significantly, to the husband who will eventually become David's enemy), the robot boy embarks on the golden road of unlimited devotion. The movie presents a profoundly bleak view of human nature—a child imprinted by and forever fixated on the parent's need. “Mommy, will you die?” is the newly programmed David's first abstract question, as well as his first use of the maternal noun. Already expressing anxiety, his query does not quite elide the notion that when this slim and pretty woman is a crone of 90, her adoring mecha will still be a child.

David's age is unfixed. He's been described as 11, though he looks three years younger and has the emotional development of a pre-schooler. In any case, his particular instance of arrested development is superseded by the defrosted Martin's return to his now shockingly expanded family. This suspended animation is also part of the fairytale. Given that Spielberg wanted to use the Disneyland theme song for the celestial communication fest that ends Close Encounters, it's perfectly appropriate that when Monica visits Martin there would be Disney murals on the walls and Tchaikovsky's Sleeping Beauty playing in the background. (Kubrick, for his part, ended Full Metal Jacket with a supremely sarcastic use of the Mickey Mouse Club marching song.)

Without ever appearing to question the narcissistic assumption that children are put on this earth to love their parents, Spielberg finds his richest material in the family trauma, sibling rivalry and emotional malfunction induced by Martin's return. One thing this future world clearly lacks is the cyborg shrink in a suitcase extrapolated by novelist Philip K. Dick. There is no one to analyse, let alone treat, the rejected David's desire to reclaim his mommy's love or his magical solution that he might do so by becoming a “real boy”. (This idea had been introduced by the malicious Martin who insists that Monica read her two sons the story of Pinocchio at bedtime.) The mecha quest for an impossible authenticity then becomes the movie's driving mechanism.

A.I. has been designed to terrorise actual children, even as it cannily harpoons the hearts of empty-nest boomer moms and pushes psychological buttons in kids (of all ages) longing for a return to the mother ship. David is Monica's toy—or rather he was. The scene in which a human mother abandons her crying, clinging, pleading robot child in the woods is as supreme a heart-clutcher as anything in Bambi. Although curiously glossed over in most reviews of the movie, this long, painful sequence which, as Manohla Dargis pointed out in the L.A. Weekly, “combines Kubrick's aesthetic of cruelty and Spielberg's aesthetic of bathos into a single devastating encounter”, is understandably the film's turning point. The hermetic suburban environment of David's family gives way to the garish dystopia of the outside world.

Spielberg has always been a master of inadvertent disclosure. One of the most powerful images in his entire oeuvre is that of the obsessed Richard Dreyfus, imprinted by the aliens of Close Encounters and constructing a mountain out of his mashed potatoes even as his distressed children look on in terrified amazement at his apparent regression to infancy. What's fascinating is that Spielberg has gone out of his way to characterise A.I. as a film made by an indulgent father: “I am particularly, at this point in my life, somewhat interested in going back a little bit to my past, to tell the kinds of stories I'd like my kids to see. You know, between Schindler and Ryan, I had a lot of complaints from my kids that I'm not making movies for them anymore … I think A.I. is a movie for my own kids.”

In what sense, one wonders. Does he mean to teach the power of stories? The idea that fantasy is real? Like Spielberg himself in Close Encounters, David takes Pinocchio as his text, searching the world in the company of Teddy (a sub-Jiminy Cricket “supertoy”) for the Blue Fairy who can grant his wish to become a real child. Unlike the puppet Pinocchio, however, David has no need to demonstrate emotional growth or, indeed, any sort of negativity. He's been designed as a perfect reproach to humanity, hard-wired for innocence. (Thus Spielberg circumvents the moral of the Aldiss story—which is also the pathos of Blade Runner—namely that the robots are more human than their creators.)

Whereas Pinocchio's greed led to his being trapped in Stromboli's carnival, blameless David is rounded up by the flying storm-troopers of the Flesh Fair, a heavy-metal demolition derby cum death camp for discarded mechas. (The sequence seems to have been imported wholesale from Mad Max beyond Thunderdome.) It's been suggested by some that this bloodthirsty mob represents Spielberg's view of his audience—although, no less than these rabid rednecks, the film-maker evidently loves the effect of the obsolete jerry-built robots running about further decomposing. Actually, in their devotion to so-called reality, the demagogues responsible for the Flesh Fair might equally represent Spielberg's view of his critics. (Rather than the fantasy of Schindler's List, these anti-mechas are demanding the documentary Shoah.) Devoted to ritual destruction, the Flesh Fair has a religious aspect: “We are only demolishing artificiality,” the cult leader explains. Intelligence will come next.

Escaping from the Flesh Fair, David and Teddy team up with (and redeem) a more profane manifestation of cyberlove. Gigolo Joe (Jude Law) is a stiff, absurdly pomaded creature who supplies his own louche soundtrack—a faraway-sounding 30s version of ‘I Only Have Eyes for You’ (the very thing surely to guarantee that a lonely repressed spinster will lie back, relax, and lose her inhibitions). Joe's line is no less primitive. “Once you've had a robot lover, you'll never want a real man again,” he assures a client. Out of concern for his children no doubt, Spielberg resists showing the sex machine in action. (Joe's bionic member is referred to by his timorous partner but, of course, never seen. This does, however, serve to link him to David who in an earlier scene had the functionality—and existence—of his penis questioned by a human playmate.)

As A.I.'s resident embodiment of cynical Kubrick consciousness, Gigolo Joe takes David to Rouge City (an elaborate extrapolation of the Milkbar from A Clockwork Orange, 1971) to consult the resident oracle, a fragmented babbling holograph. David, of course, wants to ascertain the whereabouts of the Blue Fairy. An impossible dream? At this point readers who wish to protect their own innocence are advised to check out and return after experiencing A.I. for themselves.

Sent to the end of the world, a largely submerged New York City, where he is shocked—shocked!—to discover the reification of human relations that mechas represent, little David runs amok. But this single moment of anti-capitalist rebellion is brief. David rejects his creator Professor Hobby to dive from the top of Radio City deep into the maternal vastness of the dream dump.

For an unforgettable moment, I imagined that Spielberg might really leave us with a bizarre and truly despairing image: Pinocchio frozen forever in a world where Jiminy Cricket is mute and Walt Disney dead, praying through all eternity before an inert icon of the irretrievable mother. Not to worry. The shamelessly milked miracle arrives 2000 (and one?) years later, replete with thunderous wonder, appropriate white light and a mother-and-child reunion so obliterating in its solipsism that it bids to split your skull. However sentimental its intent, though, this ending may actually be more hopeless than anything in Kubrick.

As in a Kubrick movie, the humans in A.I. are universally shown to be vain, treacherous, selfish, jealous and, above all, cruel creatures. But Spielberg understands that, no less than the robots, we in the audience have feelings—really big ones. What's more, we can dream. Thus the spectators are granted a cosmic fantasy of total symbiosis that combines the everyday mysticism of 2001: A Space Odyssey (1968), the back-to-the-womb climax of Close Encounters, and something akin to the last scene of Tristan and Isolde. It's a simulation, which is to say, it's a movie. And though it has been made just for David, there won't be a dry eye in the theatre when, having been treated to his first-ever birthday cake, the ageless cyber-child finally goes to “that place where dreams are born.” (Some cheeks, however, may be wet with tears of mirth.)

Flattering? The robot extraterrestrials of the future go out of their way to express an insane admiration for the long-gone humanity of which David represents the last “living” artefact. In somewhat the same fashion, Spielberg imagines himself to be keeping the idea of Kubrick alive. A.I. is artificial intelligence. “I felt that Stanley hadn't really died, that he was with me when I was writing the screenplay and shooting the movie,” the director has said. As A.I.'s initial ad campaign put it: “His love is real. But he is not.”