I think you're off to a pretty good start, but here's some stuff that I noticed while I was reading:
(too much explaining??? Need suggestions for a better way to write this)
Yes, I think this was maybe too much explaining. The way it's written kind of takes you out of the story for a moment. Imagine someone is reading a story to you, and then they put the book down and go "Oh, before we keep going I gotta explain this one thing to you…." That's kinda how it read to me.
As for a better way to write it, I tried my hand at it and came up with this: "Vorex shuffled into the room and sat at an uncomfortable table beside a new subject. Normally subjects were separated by hybrid and by number, but so far Vorex was the only dragon hybrid. He was placed across from a Minotaur, who much like Vorex was the only successful hybrid of its kind."
It could probably use some tweaking, but we still get the same information while still focussing on Vorex.
“Are… are you a demon?” The small boy asked in an equally small voice as he glanced at Vorex’s bat-like wings. “No, I’m a dragon. What are you?"
The proper formatting for dialogue is to hit enter and start on a new line whenever a new person speaks. So this should be formatted like this :
"Are… are you a demon?” The small boy asked in an equally small voice as he glanced at Vorex’s bat-like wings."
“No, I’m a dragon. What are you?"
The small red-headed child nodded at Vorex’s answer and moved his blanket to the side as he softly spoke again. “I’m a naga, a saw scaled viper breed.
“Apophis.” That was it. He didn’t know how he thought of the name or where it came from, but it felt right.
This felt a little too similar to when you were describing how Vorex came up with his own name. I don't think there's really anything wrong with him just coming up with names on the fly like that, but I would maybe try to find a different way to word it just to spice things up a bit.
(well written A.I??? Not well written?? Please tell me)
Seems pretty well written to me :) Granted, I don't really read or write about AIs all that often, but since you asked, I think you seem to be doing a pretty good job.
Overall, I'd recommend just proof reading a couple times. I noticed a lot of comma splices as well, as well as a couple of other errors that you may have missed (for instance, there was one point where you didn't capitalize: "…but he would never know. none of the subjects knew anything about their lives before").
Anyways, aside from all that, like I said earlier, I think your story is off to a good start and I'm definitely interested to see where it goes. And sorry for the super long critique. I know it can be kind of intimidating to see an essay length critique on something that you worked really hard on. Hopefully you found this helpful though.