Saying someone “doesn’t know [something] from their own ass” is a dated, low-brow expression in English meaning someone is completely unfamiliar with something. A person could never realistically mistake anything at all for their own ass, so the expression implies an impossible level of ignorance.

The joke here is that the AI is both comically unfamiliar with onions (as the expression usually means) and that it may have literally mistaken the onions for being buttocks or breasts.