A gamer uses a computer powered with an Nvidia Corp. chip at the Gamescon video games trade fair in Cologne, Germany, on Wednesday, Aug. 23, 2023. Gamescon runs until Sunday, Aug. 27. Photographer: Alex Kraus/Bloomberg via Getty Images
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It’s not just human life that will be remade by the rapid advance in generative artificial intelligence. NPCs (non-playable characters), the figures who populate generated worlds in video games but have to date largely run on limited scripts — think the proprietor of the store you enter — are being tested as one of the first core gaming aspects where AI can improve gameplay and immersiveness. A recent partnership between Microsoft Xbox and Inworld AI is a prime example.
Better dialogue is just the first step. “We’re creating the tech that allows NPCs to evolve beyond predefined roles, adapt to player behavior, learn from interactions, and contribute to a living, breathing game world,” said Kylan Gibbs, chief product officer and co-founder of Inworld AI. “AI NPCs are not just a technological leap. They’re a paradigm shift for player engagement.”
It’s also a big opportunity for the gaming companies and game developers. Shifting from scripted dialogue to dynamic player-driven narratives will increase immersion in a way that drives replayability, retention, and revenue.
The interaction between powerful chips and gaming has for years been part of the success story at Nvidia, but there is now a clear sense in the gaming industry that it is just beginning to get to the point where AI will take off, after some initial uncertainty.
“All developers are interested in how artificial intelligence can impact game development process,” John Spitzer, vice president of developer and performance technology at Nvidia, recently told CNBC, and he cited powering non-playable characters as a key test case.
It’s always been true that technological limits and possibilities overdetermine the gaming worlds developers can create. The technology behind AI NPCs, Gibbs says, will become a catalyst for a new era of storytelling, creative expression, and innovative gameplay. But much of what is to come will be “games we have yet to imagine,” he said.
Bing Gordon, an Inworld advisor and former chief creative officer at Electronic Arts, said the biggest advancements in gaming in recent decades have been through improvements in visual fidelity and graphics. Gordon, who is now chief product officer at venture capital firm Kleiner Perkins and serves on the board of gaming company Take-Two Interactive, believes AI will remake the world of both the gamer and game designer.
“AI will enable truly immersive worlds and sophisticated narratives that put players at the center of the fantasy,” Gordon said. “Moreover, AI that influences fundamental game mechanics has the potential to increase engagement and draw players deeper into your game.”
The first big opportunity for gen AI may be in gaming production. “That’s where we expect to see a major impact first,” said Anders Christofferson, a partner within Bain & Company’s media & entertainment practice.
In other professional tasks, such as creating presentations using software like PowerPoint and first drafts of speeches, gen AI is already doing days of work in minutes. Initial storyboard design and NPC dialogue creation are made for gen AI, and that will free up developer time to focus on the more immersive and creative parts of game making, Christofferson said.
Creating unpredictable worlds
A recent Bain study noted that AI is already taking on some tasks, including preproduction and planning out of game content. Soon it will play a larger role in developing characters, dialogue, and environments. Gaming executives, Bain’s research shows, expect AI to manage more than half of game development within five years to a decade. This may not lead to lower production costs — blockbuster games can run up total development costs of $1 billion — but AI will allow games to be delivered more quickly, and with enhanced quality.
Ultimately, the proliferation of gen AI should allow the development process of games to include the average gamer in content creation. This means that more games will offer what Christofferson calls a “create mode” allowing for increased user-generated content — Gibbs referred to it as “player-driven narratives.”
The current human talent shortage, a labor issue that exists across the software engineering space, isn’t something AI will solve in the short-term. But it may free developers up to put more time into creative tasks and learn how best to use the new technology as they experiment. A recent CNBC study found that across the labor force, 72% of workers who use AI say it makes them more productive, consistent with research Microsoft has conducted on the impact of its Copilot AI in the workplace.
“GenAI is very nascent in gaming and the emerging landscape of players, services, etc. is very dynamic – changing by the day,” Christofferson said. “As with any emerging technologies, we expect lots of learning to take place regarding GenAI over the next few years.”
Given how much change is taking place in gaming, it may simply be too difficult to forecast AI’s scale at the moment, says Julian Togelius, associate professor of computer science and engineering at New York University. He summed up the current state of AI implementation as a “medium-size deal.”
“In the game development process, generative AI is already in use by lots of people. Programmers use Copilot and ChatGPT to help them write code, concept artists experiment with Stable Diffusion and Midjourney, and so on,” said Togelius. “There is also a big interest in automated game testing and other forms of AI-augmented QA,” he added.
The Microsoft and Inworld partnership will test two of the key AI implications in the video game industry: design-time and assistance with narrative generation. If a game has thousands of NPCs in it, having AI generate individual backstories for each of them can save enormous development time — and having generative AI working while players interact with NPCs could also enhance gameplay.
The latter will be trickier to achieve, Togelius said. “I think this is much harder to get right, partly because of the well-known hallucination issues of LLMs, and partly because games are not designed for this,” he said.
Hallucinations occur when large language models (LLMs) generate responses that deviate from context or rational meaning — they speak nonsensically but grammatically, about things that don’t make sense or have any relation to the given context. “Video games are designed for predictable, hand-crafted NPCs that don’t veer off script and start talking about things that don’t exist in the game world,” Togelius said.
Traditionally, NPCs behave in predictable ways that have been hand-authored by a designer or design team. Predictability, in fact, is a core tenant of the video game world and its design process. Open-ended games are thrilling because of their sense of infinite possibility, but to function reliably there is great control and predictability built into them. Unpredictability in the gaming world is a new realm, and could be a barrier to having AI gain wider use. Working out this balance will be a key to moving forward with AI.
“I think we are going to see modern AI in more and more places in games and game development very soon,” Togelius said. “And we will need new designs that work with the strengths and weaknesses of generative AI.”
LISBON — Samsung’s foray into smart rings isn’t concerning the boss of the product category’s pioneer, Oura — in fact, Tom Hale says he’s seeing a boost in business.
“I’m sure that a major tech company making an announcement saying: ‘Hey, this is a category that matters. It’s going to be something that’s big.’ I think it’s probably helpful,” Hale told CNBC in an interview this week.
“In terms of the impact on our business, it has made zero impact. If anything, our business has gotten stronger since their announcement.”
In a wide-ranging interview with CNBC at the Web Summit conference in Lisbon, Hale discussed Oura’s plans for new areas of insight it wants to give users, how he is thinking about new devices and the company’s intentions for international expansion.
Oura’s flagship product is the Oura Ring 4, a device known as a smart ring. It is packed with sensors that can track some health metrics, allowing Oura app users to learn more about the quality of their sleep or how ready they are to tackle the day ahead.
Founded in Finland in 2013, the company has been called a pioneer by analysts in the smart ring space. Oura said it has sold more than 2.5 million of its rings since it launched its first product. CCS Insight forecasts Oura will end the year with a 49% market share in smart rings.
Competition is starting to rear its head in the space. The world’s largest smartphone maker Samsung made its first venture into smart rings this year with the Galaxy Ring, which some analysts say has put the device category on the map and popularized it with a broader audience.
Hale is keen to position Oura as a “health company and a science company from the get-go,” with the aim of its product being “clinical grade.” Oura is seeking approval from the U.S. Food and Drug Administration (FDA) for its ring to be used for diagnostics, although Hale declined to provide too many further details.
He did say that Oura’s focus on health and science is what sets it apart from competitors.
“If you’re actually thinking [of] yourself as a healthcare company, it is very different in many ways and different postures you might take towards data privacy. … So instead of being like a tech company where data is some sort of oil to be extracted and then used to create some kind of advantage of network effects, we’re really a healthcare company where your data is sacrosanct,” Hale said.
Oura’s business model relies on selling the hardware, as well as on a $5.99 monthly subscription service that allows users to get the insights from their ring. Oura says it has nearly 2 million subscribers.
“We look more like a software company than we do look like a hardware company. And I think that’s a function of the business model, and the fact that it’s working. Our subscribers are continuing to pay,” Hale said.
Oura eyes nutrition as next ‘pillar’
Oura takes the data gathered by the ring to provide insight to its users, focused on a person’s levels of sleep, activity and readiness to take on the day.
Hale said the company is now testing out nutrition, with users able to take a picture of their meal and log it into the Oura app. Also in the nutrition space, he highlighted Oura’s recent acquisition of Veri, a metabolic health startup that can take data from continuous glucose monitors — small devices inserted into a person’s arm — to give insight into someone’s blood sugar levels. Hale says that this, combined with Oura’s food tracking feature, could tell a user how certain meals affect their glucose levels.
Many glucose monitors today are invasive and need to be inserted into the skin. Some observers see a non-invasive glucose monitor on wearable gear as something that could be transformative — but Hale warns this is a difficult goal to achieve.
“The idea that a wearable [device] will get there, I think, has definitely been a Holy Grail, and like the Holy Grail, they may never find it, because it’s a very difficult problem to solve with any kind of accuracy,” Hale said.
“Never say never. Certainly, technology continues to advance and all the capabilities continue to advance,” he added.
New hardware and AI
While Oura only sells rings currently, Hale sees the company developing new products in the future. He declined to elaborate.
“I think we’ll undoubtedly see other Oura-branded products, beyond the ring,” he promised.
He also said the company hopes to work with other devices as well, even if they are not Oura’s own hardware.
Like many hardware companies, such as Apple and Samsung, Oura is looking at ways it can use the advancing capabilities of artificial intelligence to give users more personalized insights. Smartphone makers have spoken about so-called “AI agents,” which they see as assistants that are able to anticipate what a user wants.
Oura is testing out an AI product called Oura Advisor in a similar vein.
“Think of it as the doctor in your pocket that knows all the data about you,” Hale said.
International push
Hale‘s presence at the Web Summit in Lisbon underscores his push to raise Oura’s brand awareness in markets outside of the U.S., especially as more people learn about smart rings.
“I think the point about the category being something that people are learning about, the unique benefits of that maturity, is in our favor. We’re expanding internationally,” Hale said.
He said he is particularly “excited” about venturing into Western Europe, including in countries like the U.K., Germany, France and Italy. Looking even further forward, Hale said an initial public offering for the business is not currently on the table, adding that operating as a private company gives Oura more “freedom.”
“I really enjoy the freedom that we get as a private company. We’re accountable to our investors and our shareholders, but they’re willing to let us operate with a lot license,” he said. “And if we decided we wanted to turn unprofitable because we wanted to invest in owning some category of healthcare software, it’ll be fine. They would be happy for that.”
LISBON, Portugal — Tech giants are increasingly investing in the development of so-called “sovereign” artificial intelligence models as they seek to boost competitiveness by focusing more on local infrastructure.
Data sovereignty refers to the idea that people’s data should be stored on infrastructure within the country or continent they reside in.
“Sovereign AI is a relatively new term that’s emerged in the last year or so,” Chris Gow, IT networking giant Cisco’s Brussels-based EU public policy lead, told CNBC.
Currently, many of the biggest large language models (LLMs), like OpenAI’s ChatGPT and Anthropic’s Claude, use data centers based in the U.S. to store data and process requests via the cloud.
This has led to concern from politicians and regulators in Europe, who see dependence on U.S. technology as harmful to the continent’s competitiveness — and, more worryingly, technological resilience.
Where did ‘AI sovereignty’ come from?
The notion of data and technological sovereignty is something that has previously been on Europe’s agenda. It came about, in part, as a result of businesses reacting to new regulations.
The European Union’s General Data Protection Regulation, for example, requires companies to handle user data in a secure, compliant way that respects their right to privacy. High-profile cases in the EU have also raised doubts over whether data on European citizens can be transferred across borders safely.
The European Court of Justice in 2020 invalidated an EU-U.S. data-sharing framework, on the grounds that the pact did not afford the same level of protection as guaranteed within the EU by the General Data Protection Regulation (GDPR). Last year the EU-U.S. Data Privacy Framework was formed to ensure that data can flow safely between the EU and U.S.
These political development have ultimately resulted in a push toward localization of cloud infrastructure, where data is stored and processed for many online services.
Filippo Sanesi, global head of marketing and operations at OVHCloud, said the French cloud firm is seeing lots of demand for its European-located infrastructure, as they “understand the value of having their data in Europe, which are subject to European legislation.”
“As this concept of data sovereignty becomes more mature and people understand what it means, we see more and more companies understanding the importance of having your data locally and under a specific jurisdiction and governance,” Sanesi told CNBC. “We have a lot of data,” he added. “This data is sovereign in specific countries, under specific regulations.”
“Now, with this data, you can actually make products and services for AI, and those services should then be sovereign, should be controlled, deployed and developed locally by local talent for the local population or businesses.”
The AI sovereignty push hasn’t been driven forward by regulators — at least, not yet, according to Cisco’s Gow. Rather, it’s come from private companies, which are opening more data centers — facilities containing vast amounts of computing equipment to enable cloud-based AI tools — in Europe, he said.
Sovereign AI is “more driven by the industry naming it that, than it is from the policymakers’ side,” Gow said. “You don’t see the ‘AI sovereignty’ terminology used on the regulator side yet.”
Countries are pushing the idea of AI sovereignty because they recognize AI is “the future” and a “massively strategic technology,” Gow said.
Governments are focusing on boosting their domestic tech companies and ecosystems, as well as the all-important backend infrastructure that enables AI services.
“The AI workload uses 20 times the bandwidth of a traditional workload,” Gow said. It’s also about enabling the workforce, according to Gow, as firms need skilled workers to be successful.
Most important of all, however, is the data. “What you’re seeing is quite a few attempts from that side to think about training LLMs on localized data, in language,” Gow said.
The aim of the Italia project is to store results in a given jurisdiction and rely on data from citizens within that region so that results produced by the AI systems there are more grounded in local languages, culture and history.
“Sovereign AI is about reflecting the values of an organization or, equally, the country that you’re in and the values and the language,” David Hogan, EMEA head of enterprise sales for chipmaking giant Nvidia, told CNBC.
“The core challenge is that most of the frontier models today have been trained primarily on Western data generally,” Hogan added.
In Denmark for example, where Nvidia has a major presence, officials are concerned about vital services such as health care and telecoms being delivered by AI systems that aren’t “reflective” of local Danish culture and values, according to Hogan.
On Wednesday, Denmark laid out a landmark white paper outlining how companies can use AI in compliance with the incoming EU AI Act — the world’s first major AI law. The document is meant to serve as a blueprint for other EU nations to follow and adopt.
“If you’re in a European country that’s not one of the major language countries that’s spoken internationally, probably less than 2% of the data is trained on your language — let alone your culture,” Hogan said.
How regulation fueled a mindset shift
That’s not to say regulations haven’t proven an important factor in getting tech giants to think more about building localized AI infrastructure within Europe.
OVHCloud’s Sanesi said regulations like the EU’s GDPR catalyzed a lot of the interest in onshoring the processing of data in a given region.
The concept of AI sovereignty is also getting buy-in from local European tech firms.
Earlier this week, Berlin-headquartered search engine Ecosia and its Paris-based peer Qwant announced a joint venture to develop a European search index from scratch, aiming to serve improved French and German language results.
Meanwhile, French telecom operator Orange has said it’s in discussions with a number of foundational AI model companies about building a smartphone-based “sovereign AI” model for its customers that more accurately reflects their own language and culture.
“It wouldn’t make sense to build our own LLMs. So there’s a lot of discussion right now about, how do we partner with existing providers to make it more local and safer?” Bruno Zerbib, Orange’s chief technology officer, told CNBC.
“There are a lot of use cases where [AI data] can be processed locally [on a phone] instead of processed on the cloud,” Zerbib added. Orange hasn’t yet selected a partner for these sovereign AI model ambitions.
In this photo illustration, the Bluesky Social logo is displayed on a cell phone in Rio de Janeiro, Brazil, on September 4, 2024.
Mauro Pimentel | AFP | Getty Images
Micro-blogging startup Bluesky has gained over 1.25 million new users in the past week, indicating some social media users are changing their habits following the U.S. presidential election.
Bluesky’s influx of users shows that the app has been able to pitch itself as an alternative to X, formerly Twitter, which is owned by Elon Musk, as well as Meta’s Threads. The bulk of the new users are coming from the U.S., Canada and the United Kingdom, the company said Wednesday.
“We’re excited to welcome everyone looking for a better social media experience,” Bluesky CEO Jay Graber told CNBC in a statement.
Despite the surge of users, Bluesky’s total base remains a fraction of its rivals’. The Seattle startup claims 15.2 million total users. Meta CEO Mark Zuckerberg in October said Threads had nearly 275 million monthly users. Musk in May claimed that X had 600 million monthly users, but market intelligence firm Sensor Tower pegged X’s monthly base at 318 million users in October.
Created in 2019 as a project inside Twitter, when Jack Dorsey was still CEO, Bluesky doesn’t show ads and has yet to develop a business model. It became an independent company in 2021. Dorsey said in May of this year that he’s no longer a member of Bluesky’s board.
“Journalists, politicians, and news junkies have also been talking up Bluesky as a better X alternative than Threads,” wrote Similarweb, the internet traffic and monitoring service, in a Tuesday blog.
Some users with new Bluesky accounts posted that they had moved to the service due to Musk and his support for President-elect Donald Trump.
“It’s appalling that Elon Musk has transformed Twitter into a Trump propaganda machine, rife with disinformation and misinformation,” one user posted on Bluesky.
This is Bluesky’s second notable surge in the last couple of months.
Bluesky said it picked up 2 million new users in September after the Brazilian Supreme Court suspended X in the country for failing to comply with regional content moderation policies and not appointing a local representative.