An Alberta startup backed by Toyota and Radical Ventures aims to use AI to transform NPCs and game systems.
Edmonton-based Artificial Agency has emerged from stealth to raise more than CAD17 million (US$12.5 million) in seed funding to develop a “behavior engine” for artificial intelligence (AI)-powered video games.
Over the past year or so, Artificial Agency has been quietly building a solution that enables developers to incorporate generative AI into video games to create more interactive, personalized storytelling and gameplay. The AI gaming company's technology is designed to enhance in-game interactions between human players and non-player characters (NPCs) and systems.
Artificial Agency was founded in 2023 by four Alberta-based researchers at DeepMind, the AI research lab of Google's parent company Alphabet: CEO Brian Tanner, Alex Carney, Andrew Butcher and Mike Johansson.
Artificial Agency works with major video game developers to build their systems.
“We've always had a strong passion for the games industry and always wanted to find a way to really bring the cutting edge technology we've been working on out of the lab and into the industry,” Tanner told BetaKit in an interview.
The emergence of generative AI and DeepMind's closure of its Alberta office due to mass layoffs at Google prompted the groups to collaborate and secure previously unannounced equity pre-seed funding of C$5 million (US$3.7 million) led by Toronto-based AI investor Radical Ventures in April 2023. The round was backed by two entertainment and gaming-focused venture capital firms and angel investors: New York-based Tirta Ventures and the Czech Republic's Kaya VC.
Now, with $17 million in fresh seed funding and a team with experience in AI and gaming, Artificial Agency is ready to announce its existence and share more details about the product it is developing as it prepares to bring its product to market.
First reported by The Logic in May, Artificial Agency's seed round closed in June. Radical co-led the round along with new Japan-based investor Toyota Ventures, which recently announced a new fund for early-stage AI startups.
The funding was backed by Tirta and Kaya, with participation from two new investors, including Seattle-based AI investment firm Flying Fish VC and BDC Capital's Deep Tech Fund. The two rounds included about C$1.4 million in convertible notes, with the rest being equity. Tanner said Artificial Agency's seed round was an up-round, but declined to disclose the startup's valuation.
This latest round brings Artificial Agency's total funding to approximately CAD $22 million, from a group that also includes Canadian AI leaders and University of Alberta professors Richard Sutton and Michael Bowling.
“Artificial Agency is led by my former students and colleagues – people I know well,” Sutton, who is also a former distinguished research scientist at DeepMind, said in a statement. “They are the best in the world at using reinforcement learning and foundational models to create complex, life-like, purposeful agents.”
Related: Alphabet's DeepMind to close Edmonton site as part of Google layoffs
In an interview with BetaKit, Radical Ventures Principal Daniel Mulet described Artificial Agency as “a team of people who have spent a lot of time pushing the boundaries of deep learning and reinforcement learning, who have industry experience, who have a kind of founder-market fit, so to speak, and a vision that we feel is truly transformative.”
Artificial Agency spent most of 2023 developing a prototype to prove it could build an AI system that could be plugged into a commercial game and immediately start making behavioral decisions. While they were very confident this was possible based on what they had seen in academia, Kearney insisted to BetaKit that this was something “no one has ever done before.”
Getting NPCs to engage and react to the player, as in vast open-world games like Grand Theft Auto or Red Dead Redemption, typically requires developers to anticipate every possible outcome and create complex flowcharts, Tanner says. “It's a very laborious process that takes time and is hard to test, and if you don't predict something, you're not going to have a realistic, compelling reaction.”
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Artificial Agency aims to augment or replace some of this work with an AI-powered behavior engine that can recognize and react to player comments, actions, and other elements. Artificial Agency claims that its technology can be integrated into existing, unfinished, or early-stage games and customized to fit the developer's needs. Kearney and Tanner gave BetaKit a sneak peek at what their tech is currently capable of with a short live demonstration of applying the behavior engine to a Minecraft NPC.
Carney is proud of the gaming talent Artificial Agency has been able to attract to its AI gaming startup. In this regard, Tanner hopes Artificial Agency will succeed where others have failed. “There's a long history of people coming from deep tech backgrounds coming into the gaming industry and proclaiming they're going to change everything,” he said.
Building a company with deep experience in gaming as well as AI was a focus for Artificial Agency, and the company assembled a 20-person team that fit this bill: “The gaming industry has a lot of unique challenges and nuances that a typical tech startup wouldn't encounter, so having a team with a gaming and AI background in their DNA was really important to finding early connections with early customers,” Tanner said.
Related: Radical Ventures Raises New $550M AI Fund as AI Industry Heats Up
Artificial Agency is working closely with several unnamed major video game developers to build the system, with plans to make it widely available in 2025. Tanner said Artificial Agency's initial design partners include major game studios with complex technical challenges.
Tanner believes Artificial Agency's behavioral engine will enable developers to develop video games faster and “take more shots,” which will be beneficial in an industry where hits are key, and Kearney specifically noted that the engine could enable smaller, independent studios to develop more complex open-world games and overachieve. Meanwhile, Mulet sees the potential for Artificial Agency's engine to enable the creation of new categories of games.
When asked how the company's technology will impact the games industry workforce in the long term, Tanner noted that there are many negative impacts to employment in various fields in the field of generative AI, but argued that the game designers with whom Artificial Agency has demonstrated the technology are more excited about what it enables.
“They're not saying, 'This is going to take away my job,'” Tanner says. “They're saying, 'This will allow me to do something in games that I've always wanted to do, but wasn't able to do before because it required dynamically scripting characters.'”
Feature image courtesy of Artificial Agency.
