Inworld AI Raises $500 Million in Funding to Accelerate Development of AI-Powered Virtual Characters

Inworld AI, the renowned Character Engine for games and interactive experiences, has successfully secured new funding from Lightspeed Venture Partners, propelling the company’s valuation to over $500 million. The funding round also saw participation from prestigious investors such as Stanford University, Samsung Next, Microsoft’s M12 fund, First Spark Ventures co-founded by Eric Schmidt, and LG Technology Ventures.

Having raised over $100 million in total funding, Inworld AI now stands as the best-funded startup at the intersection of AI and gaming. With this influx of capital, the company plans to accelerate its research and development efforts, attract top-notch talent, invest in robust infrastructure, and introduce an open-source version of its revolutionary Character Engine.

“Inworld’s commitment to open source is a testament to our belief that collaboration fuels innovation,” remarked Michael Ermolenko, CTO and co-founder of Inworld. “By collaborating with the open source developer community, we aim to drive forward innovations in generative AI that will elevate the entire gaming industry.” For developers interested in learning more, they can visit inworld.ai/open-source.

The recent investment follows Inworld AI’s success with AI-driven non-player character (NPC) experiences, including collaborations with Team Miaozi (NetEase Games), Niantic 8th Wall, LG UPlus, Alpine Electronics, as well as community-created mods for popular games like Skyrim, Stardew Valley, and Grand Theft Auto V. At the 2022 Disney Accelerator Demo Day, Inworld showcased a groundbreaking ‘Droid Maker’ prototype, developed in partnership with ILM Immersive, showcasing the company’s innovative capabilities.

“In a platform shift like AI, ‘generational’ companies won’t only incrementally improve upon existing workflows with faster, better, or cheaper tools; they will create completely novel, previously impossible user experiences—like Inworld,” said Moritz Baier-Lentz, a partner at Lightspeed Venture Partners, who is joining the company’s board of directors. “Stack-ranking the 200+ investable opportunities at the intersection of gaming and AI—based on upside, team caliber, product velocity, and traction—Inworld simply stands out: while everyone is circling and seeking to capitalize on the ‘new world order,’ Ilya, Kylan, Michael and the team are uniquely positioned to seize an outsized opportunity. Having previously led Inworld’s Seed round, I couldn’t be more excited to partner up with them again in my new role at Lightspeed.”

Inworld’s technology goes beyond existing large language models (LLMs) and chatbots, allowing developers to power AI-driven non-player characters (NPCs), bringing depth and realism to characters, and rendering them within the logic and fantasy of their worlds. AI NPCs exhibit complex and lifelike human behaviors, increasing immersion for players. Going beyond dialogue trees with conversational AI is just the start.

Unlike chatbots, Inworld powers multimodal character expression by orchestrating multiple machine learning models that are designed to mimic the full-range of human communication. The platform allows developers to link Inworld’s character brains to their animation and rigging systems, including in 3D environments. Smart NPCs can learn and adapt, navigate relationships with emotional intelligence, have memory and recall, and are capable of autonomously initiating goals, performing actions, and following their own motivations that can drive the narrative and integrate with the broader player experience.

“The next generation of games will be judged by how immersive the experiences feel,” said Ilya Gelfenbeyn, CEO and co-founder of Inworld. “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. Populating experiences with characters that behave with convincing real-time responses and actions will play a substantial role in getting us to the promise of truly interactive entertainment.”

The Inworld Character Engine is integrated in the industry’s top game development engines, and is featured in Unity’s new AI Marketplace as a Unity Verified Solution. Last October, Inworld also received an Epic MegaGrant, joining a community of creative, noteworthy, and innovative projects built around Unreal Engine. Inworld’s developer platform introduces a layer of artificial intelligence on top of Unreal Engine’s MetaHumans to help build the most convincing characters.

“AI-driven characters are new magic. 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,” said John Gaeta, Academy Award winner, and Chief Creative Officer, Inworld. “This type of interactive media will open up new avenues of creative expression, with narratives guided by the collective imagination of creators and the audience. Creatives will invent, spark, improvise, and guide these persistent role players, personas, relationships, scenarios, and dynamic worlds.”

Generative AI is on track to usher in an era of tremendous opportunity and transformative change not only for game developers, but for players, too. According to the Future of NPCs, a report that surveyed over 1,000 U.S. gamers, 99% of gamers believe advanced AI NPCs would positively impact gameplay. 78% of gamers would spend more time playing, and more importantly, 81% of gamers would be willing to pay more for a game with advanced AI NPCs.

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