Microsoft has forged a new partnership with artificial intelligence company Inworld AI to create game development tools creators can use to bring AI-driven characters and quest lines to life.

The partnership was announced on Monday by Haiyan Zhang, Xbox’s General Manager of Gaming AI, and will focus heavily on leveraging the technology to generate game dialogue, dynamic quests and missions for players to engage in.

The partnership will bring together “Inworld’s expertise in working with generative AI models for character development, Microsoft’s cutting-edge cloud-based AI solutions including Azure OpenAI Service,” as well as Xbox’s insights on game developer’s needs and the way players engage with their games, according to Zhang.

“Together, we aim to deliver an accessible, responsibly designed multi-platform AI toolset to assist and empower creators in dialogue, story & quest design,” she said.

The partnership is just the latest way Microsoft is investing in the AI space. This year alone, Microsoft integrated popular AI tools such as Dall-E 3 into its search engine Bing, and announced a deepened partnership with Open AI, the company behind Chap-GPT.

It is also nothing new for Inworld AI, which has already created and published games showing off its technology.

The games industry at large is still figuring out AI’s place in the medium. While some creators are adamantly against using AI in any capacity as they worry it could kill jobs or divert games from games being wholly a human creator’s vision, others see the tech as something that can make development more efficient and expand what non-playable characters are capable of.

Earlier this year, Unity, the company behind popular development tools used by many indie game studios, announced its own set of generative AI features meant to make game development a bit more approachable. Epic’s Unreal Engine has also embraced the integration of generative AI, including plugins powered by Inworld AI to help generate dialogue. In March, French publisher Ubisoft announced its own intentions to develop an AI tool for more realistic procedurally-generated reactive dialogue..

Not every company in games is on board with AI’s implementation, however. In August, a mod called “Sentient Streets,” which used Inworld’s tech to create living non-playable characters players could talk to and get missions from in Grand Theft Auto 5, was forcibly removed from YouTube and mod sites like Nexus mods by the game’s publisher, Take Two.

The creator of Sentient Streets explained to Eurogamer at the time that the mod was intended as a testing ground for using generative AI to create more engaging, dynamic worlds that react to the player in more substantial ways.

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