2025 was the year generative AI made its presence felt in the video game industry. Its use has been discovered in some of the most popular games of the year, and CEOs from some of the largest game studios claim it’s being implemented everywhere in the industry including in their own development processes. Meanwhile, rank-and-file developers, especially in the indie games space, are pushing back against its encroachment, coming up with ways to signal their games are gen-AI free.
Generative AI has largely replaced NFTs as the buzzy trend publishers are chasing. Its proponents claim that the technology will be a great democratization force in video game development, as gen AI’s ability to amalgamate images, text, audio, and video could shorten development times and shrink budgets — ameliorating two major problems plaguing the industry right now. In service to that idea, numerous video game studios have announced partnerships with gen-AI companies.
Ubisoft has technology that can generate short snippets of dialogue called barks and has gen-AI powered NPCs that players can have conversations with. EA has partnered with Stability AI, Microsoft is using AI to analyze and generate gameplay. Outside of official partnerships, major game companies like Nexon, Krafton, and Square Enix are vocally embracing gen AI.
As a result, gen AI is starting to show up in games in a big way. Up until this point, gen AI in gaming had been mostly relegated to fringe cases — either prototypes or small, low-quality games that generally get lost in the tens of thousands of titles released on Steam each year. But now, gen AI is cropping up in the year’s biggest releases. ARC Raiders, one of the breakout multiplayer shooter hits of the year, used gen AI for character dialogue. Call of Duty: Black Ops 7 used gen-AI images. Even 2025’s TGA Game of the Year, Clair Obscur: Expedition 33, featured gen-AI images before they were quietly removed.
Reaction to this encroachment from both players and developers has been mixed. It seems like generally, players don’t like gen AI showing up in games. When gen-AI assets were discovered in Anno 117: Pax Romana, the game’s developer Ubisoft claimed the assets “slipped through” review and they were subsequently replaced. When gen-AI assets were found in Black Ops 7, however, Activision acknowledged the issue, but kept the images in the game. Critical response has also been lopsided. ARC Raiders was awarded low scores with reviewers specifically citing the use of gen AI as the reason. Clair Obscur, though, was nigh universally praised and its use of gen AI, however temporary, has barely been mentioned.
It seems like developers are sensitive to the public’s distaste for gen AI but are unwilling to commit to not using it. After gen-AI assets were discovered in Black Ops 7, Activision said it uses the tech to “empower” its developers, not replace them. When asked about gen AI showing up in Battlefield 6, EA VP Rebecka Coutaz called the technology seductive but affirmed it wouldn’t appear in the final product. Swen Vincke, CEO of Baldur’s Gate 3 developer Larian, said gen AI is being used for the studio’s next game Divinity but only for generating concepts and ideas. Everything in the finished game, he claimed, would be made by humans. He also hinted at why game makers insist on using the tech despite the backlash developers usually receive whenever it’s found.
“This is a tech-driven industry, so you try stuff,” he told Bloomberg reporter Jason Schreier in an interview. “You can’t afford not to try things because if somebody finds the golden egg and you’re not using it, you’re dead.”
Comments from other CEOs reinforce Vincke’s point. Junghun Lee, the CEO of ARC Raiders’ parent company Nexon, said in an interview that, “It’s important to assume that every game company is now using AI.”
The problem is, though, gen AI doesn’t yet seem to be the golden egg its supporters want people to believe it is. Last year, Keywords Studios, a game development services company, published a report on creating a 2D video game using only gen-AI tools. The company claimed that gen-AI tools can streamline some development processes but ultimately cannot replace the work of human talent. Discovering gen AI in Call of Duty and Pax Romana was possible precisely because of the low-quality of the images that were found. With Ubisoft’s interactive gen-AI NPCs, the dialogue they spout sounds unnatural and stilted. Players in the 2025 Chinese martial arts MMORPG Where Winds Meet are manipulating its AI chatbot NPCs to break the game, just like Fortnite players were able to make AI-powered Darth Vader swear.
For all the promises of gen AI, its current results do not live up to expectations. So why is it everywhere?
One reason is the competitive edge AI might but currently can’t provide that Swen Vincke alluded to in his interview with Bloomberg. Another reason is also the simplest: it’s the economy, stupid. Despite inflation, flagging consumer confidence and spending, and rising unemployment, the stock market is still booming, propped up by the billions and billions of dollars being poured into AI tech. Game makers in search of capital to keep business and profits going want in on that. Announcing AI initiatives and touting the use of AI tools — even if those tools have a relatively minor impact on the final product — can be a way to signal to AI-eager investors that a game company is worth their money.
That might explain why the majority of gen-AI’s supporters in gaming come from the C-suite of AAA studios and not smaller indie outfits who almost universally revile the tech. Indies face the same economic pressure as bigger studios but have far fewer resources to navigate those pressures. Ostensibly, indie developers are the ones who stand to benefit the most from the tech but, so far, are its biggest opponents. They are pushing back against the assertion that gen AI is everywhere, being used by everybody, with some marking their games with anti-AI logos proclaiming their games were made wholly by humans.
For some indie developers, using gen AI defeats the purpose of game making entirely. The challenge of coming up with ideas and solutions to development problems — the things gen AI is supposed to automate — is a big part of game making’s appeal to them. There are also moral and environmental implications indie developers seem especially sensitive to. Gen-AI outputs are cobbled from existing bodies of work that were often used without consent or compensation. AI data centers are notorious for consumptive energy usage and polluting their surrounding areas, which are increasingly focused in low-income and minority communities.
With its unrealized promises and so-far shoddy outputs, it’s easy to think of gen AI as gaming’s next flash in the pan the way NFTs were. But with gaming’s biggest companies increasingly reporting their use, gen AI will remain a lightning rod in game development — until the tech improves, or, like with NFTs, the bubble pops.
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![This former notorious red-light district is now one of the world’s top AI hubs | TechCrunch
What every U.K. AI startup wants to know these days is, how can I get office space in King’s Cross?
The area is so hot that a VC firm allegedly recently won a deal by promising a founder office space in the neighborhood. “We stop at nothing to win deals [for] and to support” founders, “including helping them source office space when needed,” the firm told me when asked about the rumor, declining to confirm or deny any details.
The neighborhood’s popularity began back in 2016 when DeepMind — then newly acquired by Google — moved in. Soon after, a flood of AI startups followed, wanting to be around the Google DeepMind magic. Today, they hope to take advantage of the cluster of AI talent there.
This has transformed King’s Cross into one of the world’s top AI hubs, rivaled only by San Francisco and Beijing. Around London, it’s known by the sobriquet “Knowledge Quarter,” as it’s home to names like OpenAI, Meta, Isomorphic Labs, Cusp AI, Wayne, Recursive, and, a little farther down the road, Synthesia and Anthropic. The European Technology Network (ETN) just moved into a glossy new office nearby, while University College London sits around the corner.
Mixed in with the new developments are trendy food spots like Hoppers and BAO. Hop a train from King’s Cross, and founders can be in Cambridge in 45 minutes to source talent or can be in Paris in two hours to strike a deal.
Who would have guessed that a little more than 20 years ago, this was one of the seediest areas in London?
“In the ’80s, crack and heroin made the area a major narcotics market,” Hussein Kanji, an investor at Hoxton Ventures, said, recalling syringes in tree trunks and gangs patrolling the streets. “In 1982, the local church was occupied by the English Collective of Prostitutes for 12 straight days.” Then, in the early 2000s, a real estate developer had a dream and, well, “now it is the AI hotbed of the United Kingdom,” Kanji said. “What a change.” Around 18 months ago, his portfolio company BioCorteX moved from the neighborhood Holborn to the Jellicoe building in King’s Cross, hoping to be near the action. “Lots going on in London right now,” Nik Sharma, co-founder of BioCorteX, told me. “Lots of hyperscalers moving in.” That includes, reportedly, Jeff Bezos’ AI company Prometheus, which is also said to be in talks to move into the Jellicoe.
There are around 3,600 AI startups in London, which, together, have raised around .1 billion out of the .8 billion raised in the city since late July, according to Dealroom. Since the start of June, AI-related startups have leased more than 1 million square feet of office space in London, according to the real estate firm Knight Frank. With that, prime rents in King’s Cross have risen 18% over the past three years, Chris Dunn, a commercial insight associate at the firm, told me. That percentage represents only the largest leases encompassing at least 10,000 square feet, like the ones OpenAI and Prometheus are signing. The shorter deals go for even more, he said, and now the vacancy rate for conventional office space is just 0.9%. “Demand has outstripped supply,” he continued.
Today, one of the big topics of the area is sovereignty. It was a wake-up call for many when Anthropic shut off access to Mythos and Fable this summer, leaving some in the ecosystem to conclude: “We’d better look after ourselves,” Saul Klein, co-founder of the VC firm Phoenix Court, told me.
Phoenix Court is located in the King’s Cross area and has three portfolio companies in the vicinity, including Olix (which just announced a .3 billion valuation), Early Health and CoMind. Robin Klein, co-founder of the firm, said the shutdown of Fable and Mythos access was a “small but sharp reminder that Europe can’t simply rent its AI capabilities and capacity; it needs to build and hold some of its own.” King’s Cross, he said, is where much of this building is actually happening.
“The bigger question,” he continued, “is whether the U.K. builds the infrastructure, compute, energy, capital, to make this self-reliance durable, rather than just hosting outposts of U.S. labs.”
Image Credits:Phoenix Court
Top founders want to stay
Simon Kohl, founder of Latent Labs, has offices in King’s Cross and San Francisco. The London office, at the moment, is growing faster, and he’s more bullish than ever on the ecosystem, he said. “The mood right now feels less like London trying to catch up and more like London becoming one of the default places to start a serious AI company,” he said. Look around and you are likely to see Wayve testing its autonomous cars. Founded in 2017 by co-founder Alex Kendall, the unicorn is one of London’s biggest success stories.
“Ten years ago, building a frontier AI company from London felt like an unusual choice,” Kendall told me. “Now it feels like an obvious one.” Wayve moved into King’s Cross in 2018 looking for a space that could double as a garage — “a rare combination in Central London,” Kendall said. He has watched the ecosystem mature around him — and it’s now evident that a startup can stay in London, raise serious capital, hire world-class AI talent, and remain globally competitive, he said. Down the street from Anthropic’s new 158,000-square-foot office is the AI agent builder Sierra and the AI video platform Synthesia.
Laura Gonzalez Florez, Synthesia’s chief of staff and head of people, says the company moved into its glossy new office building a year ago to accommodate its growing team. They were drawn to the area for the same reason as everyone else: “It’s very close to the airport … very close to where a lot of investors are,” she said.
Image Credits:Synthesia
Around two-thirds of Synthesia’s engineers are remote, Gonzalez Florez said, letting the company tap into an affordable, international, and diverse talent pool and helping it scale faster. “From London, we can hire and work, without any problem, people from anywhere, from Slovenia to Portugal,” she said.
Unsurprisingly, London’s AI boom is also causing a talent war.U.K. AI job postings have skyrocketed in the past few years, per data from PwC. When Anthropic announced it moved into town earlier this year, it listed, for example, a salary range of £260,000 to £630,000 for a machine learning research engineer when the average salary in London for the same role is around £102,000. Some founders in the U.K., like those in Silicon Valley, are being forced to raise more and bigger rounds to keep up.
“The real test is whether more globally significant AI companies are founded, funded, and scaled from the U.K., while continuing to attract the world’s best talent to build them here,” Zain Ali, founder of the King’s Cross-based AI legal firm Centuro, told me. “If that continues to happen, King’s Cross won’t just be an AI hub. It’ll become one of the U.K.’s most important strategic assets.”
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#Thisformernotorious #redlight #districtis #nowone #worlds #top #hubs #TechCrunchUK This former notorious red-light district is now one of the world’s top AI hubs | TechCrunch
What every U.K. AI startup wants to know these days is, how can I get office space in King’s Cross?
The area is so hot that a VC firm allegedly recently won a deal by promising a founder office space in the neighborhood. “We stop at nothing to win deals [for] and to support” founders, “including helping them source office space when needed,” the firm told me when asked about the rumor, declining to confirm or deny any details.
The neighborhood’s popularity began back in 2016 when DeepMind — then newly acquired by Google — moved in. Soon after, a flood of AI startups followed, wanting to be around the Google DeepMind magic. Today, they hope to take advantage of the cluster of AI talent there.
This has transformed King’s Cross into one of the world’s top AI hubs, rivaled only by San Francisco and Beijing. Around London, it’s known by the sobriquet “Knowledge Quarter,” as it’s home to names like OpenAI, Meta, Isomorphic Labs, Cusp AI, Wayne, Recursive, and, a little farther down the road, Synthesia and Anthropic. The European Technology Network (ETN) just moved into a glossy new office nearby, while University College London sits around the corner.
Mixed in with the new developments are trendy food spots like Hoppers and BAO. Hop a train from King’s Cross, and founders can be in Cambridge in 45 minutes to source talent or can be in Paris in two hours to strike a deal.
Who would have guessed that a little more than 20 years ago, this was one of the seediest areas in London?
“In the ’80s, crack and heroin made the area a major narcotics market,” Hussein Kanji, an investor at Hoxton Ventures, said, recalling syringes in tree trunks and gangs patrolling the streets. “In 1982, the local church was occupied by the English Collective of Prostitutes for 12 straight days.” Then, in the early 2000s, a real estate developer had a dream and, well, “now it is the AI hotbed of the United Kingdom,” Kanji said. “What a change.” Around 18 months ago, his portfolio company BioCorteX moved from the neighborhood Holborn to the Jellicoe building in King’s Cross, hoping to be near the action. “Lots going on in London right now,” Nik Sharma, co-founder of BioCorteX, told me. “Lots of hyperscalers moving in.” That includes, reportedly, Jeff Bezos’ AI company Prometheus, which is also said to be in talks to move into the Jellicoe.
There are around 3,600 AI startups in London, which, together, have raised around .1 billion out of the .8 billion raised in the city since late July, according to Dealroom. Since the start of June, AI-related startups have leased more than 1 million square feet of office space in London, according to the real estate firm Knight Frank. With that, prime rents in King’s Cross have risen 18% over the past three years, Chris Dunn, a commercial insight associate at the firm, told me. That percentage represents only the largest leases encompassing at least 10,000 square feet, like the ones OpenAI and Prometheus are signing. The shorter deals go for even more, he said, and now the vacancy rate for conventional office space is just 0.9%. “Demand has outstripped supply,” he continued.
Today, one of the big topics of the area is sovereignty. It was a wake-up call for many when Anthropic shut off access to Mythos and Fable this summer, leaving some in the ecosystem to conclude: “We’d better look after ourselves,” Saul Klein, co-founder of the VC firm Phoenix Court, told me.
Phoenix Court is located in the King’s Cross area and has three portfolio companies in the vicinity, including Olix (which just announced a .3 billion valuation), Early Health and CoMind. Robin Klein, co-founder of the firm, said the shutdown of Fable and Mythos access was a “small but sharp reminder that Europe can’t simply rent its AI capabilities and capacity; it needs to build and hold some of its own.” King’s Cross, he said, is where much of this building is actually happening.
“The bigger question,” he continued, “is whether the U.K. builds the infrastructure, compute, energy, capital, to make this self-reliance durable, rather than just hosting outposts of U.S. labs.”
Image Credits:Phoenix Court
Top founders want to stay
Simon Kohl, founder of Latent Labs, has offices in King’s Cross and San Francisco. The London office, at the moment, is growing faster, and he’s more bullish than ever on the ecosystem, he said. “The mood right now feels less like London trying to catch up and more like London becoming one of the default places to start a serious AI company,” he said. Look around and you are likely to see Wayve testing its autonomous cars. Founded in 2017 by co-founder Alex Kendall, the unicorn is one of London’s biggest success stories.
“Ten years ago, building a frontier AI company from London felt like an unusual choice,” Kendall told me. “Now it feels like an obvious one.” Wayve moved into King’s Cross in 2018 looking for a space that could double as a garage — “a rare combination in Central London,” Kendall said. He has watched the ecosystem mature around him — and it’s now evident that a startup can stay in London, raise serious capital, hire world-class AI talent, and remain globally competitive, he said. Down the street from Anthropic’s new 158,000-square-foot office is the AI agent builder Sierra and the AI video platform Synthesia.
Laura Gonzalez Florez, Synthesia’s chief of staff and head of people, says the company moved into its glossy new office building a year ago to accommodate its growing team. They were drawn to the area for the same reason as everyone else: “It’s very close to the airport … very close to where a lot of investors are,” she said.
Image Credits:Synthesia
Around two-thirds of Synthesia’s engineers are remote, Gonzalez Florez said, letting the company tap into an affordable, international, and diverse talent pool and helping it scale faster. “From London, we can hire and work, without any problem, people from anywhere, from Slovenia to Portugal,” she said.
Unsurprisingly, London’s AI boom is also causing a talent war.U.K. AI job postings have skyrocketed in the past few years, per data from PwC. When Anthropic announced it moved into town earlier this year, it listed, for example, a salary range of £260,000 to £630,000 for a machine learning research engineer when the average salary in London for the same role is around £102,000. Some founders in the U.K., like those in Silicon Valley, are being forced to raise more and bigger rounds to keep up.
“The real test is whether more globally significant AI companies are founded, funded, and scaled from the U.K., while continuing to attract the world’s best talent to build them here,” Zain Ali, founder of the King’s Cross-based AI legal firm Centuro, told me. “If that continues to happen, King’s Cross won’t just be an AI hub. It’ll become one of the U.K.’s most important strategic assets.”
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#Thisformernotorious #redlight #districtis #nowone #worlds #top #hubs #TechCrunchUK](https://techcrunch.com/wp-content/uploads/2026/08/DM9A2852.jpg?w=680)

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