--- title: "In Disturbing Demo, AI-Powered Video Game Characters Panic When Told They’re Just Code" description: "A demo for a video game based on \"The Matrix\" franchise had AI-powered non-playable characters realize they were code inside a simulation." date: "2025-07-30" modified: "2025-07-30" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/demo-video-game-characters-panic-code-matrix" categories: - "Artificial Intelligence" tags: - "artificial intelligence" - "generative ai" - "large language models" - "the matrix" - "video games" --- # In Disturbing Demo, AI-Powered Video Game Characters Panic When Told They’re Just Code ![A demo for a video game based on "The Matrix" franchise had AI-powered non-playable characters realize they were code inside a simulation.]() *\Image: KevLar Gaming via YouTube\* Last month, the union SAG-AFTRA, which represents video game performers and other actors, [ended a nearly yearlong strike]() with a tentative agreement on "guardrails" against the use of artificial intelligence. The gaming industry has been in disarray, with publishers chomping at the bit to start harnessing AI to augment — or, realistically, replace — the jobs of voice actors and writers. And we're not just talking about scripts or voice lines generated by an algorithm. In the not-so-distant future, gamers could be interacting with AI-powered agents, setting a new precedent for levels of immersion. As the [*New York Times* reports](), we've already seen glimpses of such a future. Two years ago, Australian tech company Replica Studios released a demo for a game based on "The Matrix" franchise. Non-playable characters, powered by generative AI, were given a voice to react in real-time to a human gamer with a microphone. Things got unsettling fairly quickly, with some NPCs expressing a disturbing level of chagrin upon realizing they weren't real. It must've been a strange experience for the gamer, reminiscent of the mind-bending source material, which posits reality itself could be a simulated experience created by machines. "I need to find my way out of this simulation and back to my wife," one man told the gamer in the demo, as quoted by the *NYT*. "Can’t you see I’m in distress?" "What does that mean?" a woman said. "Am I real or not?" A number of game studios are heavily investing in an AI-fueled future for the industry, from [simulated environments]() and level designs to [autonomous agents]() that can play test instead of humans. That commitment is already coming at a steep cost to human labor, with [mass layoffs]() hitting several high-profile game developers over the last couple of years. But how long until AI-powered tools will become commonplace in the industry remains to be seen. "There is a very big gap between prototypes and production," AI tech company Inworld AI CEO Kylan Gibbs told the *NYT*. Even Replica Studios, the company behind the "Matrix"-inspired demo, went under last year as costs ballooned and the competition grew. But other companies, including heavy hitters like Sony and Nvidia, are still working on populating video game worlds with simulated people. Yet many of these AI models remain prohibitively expensive to run, which could compound the industry's issues with [soaring costs](). "How do we push the research community in a more useful direction?" Gibbs told the *NYT*. "It’s a cheaper way to make games, but it is going to cost you 5,000 times more to run a game, so is it actually cheaper?" Others in the industry are calling for keeping humans at the heart of video games, or citing concerns that an LLM-powered NPC could lead to all kinds of unpredictable — and potentially unsavory — behavior. **More on video games:** *[Rocket Scientists Hooked Up ChatGPT to the Controls of a Spaceship, and the Results Were Not What You Might Expect]()* ## Author I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida. ### Author social links [Bluesky]()