Sony appears to be developing AI technology that could enable its PlayStation game characters to interact even more directly with players.As The Verge uncovered Monday, a video narrated by Sony Interactive Entertainment's director of software engineering, Sharwin Raghoebardajal, features an AI-enabled version of the character Aloy from the company's Horizon game franchise.Read more: How to Use AI to Troubleshoot Tech IssuesIn the video, which has been removed from YouTube, the character could hold conversations with a player using technologies including OpenAI's GPT-4 and Llama 3, as well as some of Sony's own speech and facial-animation technology.Read more: Best Handheld Game Consoles of 2025The Verge says it got wind of the video from an anonymous tipster. After its story was published, a copyright claim from Muso -- a content-protection firm that works with Sony -- made the video unavailable.Read more: I Won't Use AI Smart Health Features for My Own Sake. Here's WhyWhile the original video has been taken down, parts of it continue to appear online.According to The Verge, the video demonstrated the prototype-stage technology on PC, but it could be adapted for Sony's PlayStation 5 console.Like many other tech companies, Sony has been developing different types of AI agents and technologies.On a Sony AI website, the company says it's "revolutionizing human interactions in games and virtual worlds with cutting-edge AI agents that unlock new possibilities and deeper connections for game developers and players."Read more: The 17 Best PS5 Games Right NowSony did not immediately respond to a message from CNET about the leaked video report.While companies from Nvidia, Apple, Google, Microsoft, OpenAI and Meta are in a race to develop new AI models and technologies, Sony's efforts appear to be geared toward enhancing gameplay and giving players of its games ways to interact with characters or get guidance on navigating their experiences.Previous reports, mainly based on Sony patent filings, have suggested that the company has been developing AI assistants that would provide guidance or help for game players. These efforts seem similar to those of Nvidia and Microsoftwith Inworld AI.AI-driven characters could bring challengesNic Young, CEO and co-founder of Oh, a platform that works in AI infrastructure for avatars and other identity-based content, said Sony's move could increase the playability of its games, particularly open-world ones."We've likely all played Skyrim's main storyline half a dozen times, and while there's always new quirks and discoveries, eventually the repetitive character dialogue chips away at the novelty," Young told CNET. "Imagine instead if those characters could deliver fresh dialogue every time, fully aware of and reacting to the player's specific actions and storyline -- it would make the unpredictability and excitement infinite."Young said AI-powered characters could make some games feel more personalized and break the mold of scripted dialogue trees, making storylines more unique."AI is inherently unpredictable -- its creativity and novelty stem directly from its non-deterministic nature, which makes it challenging to control," he said. "Striking the right balance between boring, but controllable, and creative, but unpredictable is especially critical for major companies like Sony."He said the challenges would be in putting guardrails around that unpredictability to make it safe for players and drawing enough computing resources to make the AI compelling.Done right, though, AI could change the nature of these types of games."Magic in gaming comes from players having truly unique, immersive, personalized experiences," Young said. "Transitioning from pre-scripted NPCs to genuinely intelligent characters is like the leap from reading a book to exploring an open-world game, all over again."