Microsoft has partnered with Inworld AI to develop game tools for Xbox, allowing enhanced artificial intelligence (AI) capabilities in character creation and more. Spotted by The Verge, this multiyear partnership aims to provide developers access to AI for game development. Inworld AI plans to focus on the AI design copilot and AI character runtime engine, both of which can be used for creating new storylines.

The Inworld AI character engine previously supported the AI-powered GTA 5 story mod Sentient Streets. This collaboration intends to offer an AI toolset that can assist creators in dialogue, story, and quest design, facilitating the gaming development process for developers of all scales, worldwide, and across varied platforms. It should be noted that the use of these development tools is optional.

The topic of AI usage in game development is a point of contention, with companies like Ubisoft and Embark Studios leveraging AI capabilities in their games. Microsoft, Xbox's parent company, has shown an increased interest in AI, investing in OpenAI earlier in the year and enhancing its search engines Bing and Edge with the same AI technology used by OpenAI's chatbot, ChatGPT.