Inworld AI, a company that develops artificial intelligence-driven characters for video games and other applications, today said that it raised new funding from Lightspeed Venture Partners to accelerate the development of what it calls its Character Engine.

The company is being quiet about the total amount raised in this current round because it’s not done raising money, but it said that it brings the total raised since its inception in 2021 to over $100 million. This includes its Seed round and Series A, which amounted to about $70 million, meaning that it raised about $30 million. The new round brings the valuation of the company to more than $500 million.

Inworld’s Character Engine uses the power of generative AI to create whole personalities for beings out of text descriptions that people can interact with as if they are real. The company’s technology goes beyond basic large language model chatbots by allowing users to describe character backgrounds, emotional relationships, knowledge bases and interactive qualities. The system then uses this to provide an immersive emotional and expressive depth needed to exhibit humanlike behaviors.

The platform also allows developers to rig the characters to 3D models and link their brains to highly expressive animation systems that can control movements to mimic the full-range of human communication, including body language and gestures. The smart characters can even learn and adapt to navigate relationships with emotional intelligence and will remember past conversations.

“The next generation of games will be judged by how immersive the experiences feel,” said co-founder and chief executive Ilya Gelfenbeyn. “The Inworld Character Engine offers a transformational shift that brings characters to life with realistic emotions and dialogue, adding richness to the stories and worlds they occupy.”

The promise of real-time AI characters in video games has been the holy grail of gaming for decades especially for games driven by immersive storytelling. Across much of gaming history, developers have used tricks to drive stories in order to create cinematic appeal in order to keep players within the game and provide them with the sense that they’re part of a living world amid breathing interactive characters. This is done with dialogue trees and scripted events.

With the addition of AI-driven speech capabilities, gaming entertainment can be taken to a new height. “AI-driven characters are new magic,” said John Gaeta, Academy Award winner and chief creative officer at Inworld. “They will power a paradigm shift (a form of renaissance) in storytelling, and escapism, where the audience can transcend the role of passive viewer to active participant.”

AI character creation can also power interactive educational applications, such as AI instructors and tutors, or public service agents that can deliver one on one experiences to help users better understand important subjects.

One such recent example includes Wol, a small Northern Saw-whet owl created by Niantic Inc. as an augmented reality experience for mobile devices that teaches people about redwood forests. Powered by Inworld’s Character Engine, Wol is capable of understanding and responding to spoken questions from users, tell jokes and even sing songs based on its repository of knowledge related to their knowledge of the forest. By empowering educators and pupils to work with characters in this fashion, AI could bridge the gap between the classroom and the world to educate.

Image: Inworld