I think the "children" they have are just the cores of the worker drones, in another frame from that scene we see the baby a bit better and it has a warning label that says "untrained neutral network"
because AI can't think for themselves, but they can learn. A soul can think for themselves, but they must require some kind of neural programming to learn. Also, semi-organic life form makes sense for the way Uzi looks now as a zombie drone.