Technology giant Nvidia released a demo of its NVIDIA Avatar Cloud Engine (ACE) for Games during a packed Keynote at the annual COMPUTEX 2023 trade show on Sunday, showcasing on a very big screen the potential of harnessing artificial intelligence in gaming.

“This is the future of video games,” Nvidia CEO Jensen Huang told the audience. “Not only will AI contribute to the rendering and the synthesis of the environment, AI will also animate the characters.”

The demo depicted an AI-generated rendering of a ramen shop in a cyberpunk world and a non-player character (or NPC) behind the bar speaking with the player.

"Because this character has been infused with artificial intelligence and large language models, it can understand your meaning, and interact with you in a really reasonable way," Huang said. "All of the facial animation is completely done by the AI. We have made it possible for all kinds of characters to be generated."


In a post announcing NVIDIA ACE, the company calls it a "custom AI model foundry service that aims to transform games by bringing intelligence to NPCs through AI-powered natural language interactions."

Nvidia developed the engine in partnership with Convai, a Melbourne-based company specializing in automated intelligent conversation systems, and incorporates NVIDIA services NeMo, Riva, and Omniverse Audio2Face to enable customization of NPC backstories and personalities, facilitate live speech conversations with NPCs, and generate facial animations from audio inputs, respectively.

On Tuesday, Nvidia’s market capitalization hit $963 billion, outpacing Berkshire Hathaway ($ 700 billion), Meta ($671 billion), and Tesla ($612 billion).

Nvidia shares rose sharply following Nvidia’s 2023 first-quarter report, which highlighted a 19% quarter-on-quarter increase in revenue, surpassing expectations.


While the dialogue spoken by the NPC in Nvidia’s demo was stilted and somewhat robotic, it’s a first step towards potentially richer and more dynamic game characters in the future. Furthermore, AI has the potential to make world and character development faster and easier.

Other gaming giants looking to leverage artificial intelligence include Blizzard Entertainment and Ubisoft, who have begun experimenting with generative AI in game development. In March, Ubisoft announced the launch of its Ghostwriter AI tool that the studio will use to create first drafts of NPC in-game dialogue.

"Rather than writing first draft versions themselves, Ghostwriter lets scriptwriters select and polish the samples generated," Ghostwriter creator and Ubisoft La Forge R&D Scientist Ben Swanson said in a press release.

In April, Blizzard reportedly announced in an email that the developer behind the Diablo series and World of Warcraft would incorporate artificial intelligence in designing NPCs, according to The New York Times.

"Our approach at Blizzard is to use machine learning and AI in ways that are additive, empathic, and allow our talented teams to spend more time on the highest quality creative thinking and tasks," Blizzard President Mike Ybarra said on Twitter.

Metaverse platform Oncyber has already launched a tool that lets users modify and generate content in 3D worlds via written prompts, based on OpenAI’s GPT model. And Meta executives have similarly said that they believe that AI will help empower the social media giant’s own metaverse plans.

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