Inworld AI, the Leading Character Engine, Raises New Funding From Lightspeed, Stanford, Microsoft’s M12 Fund

New Investment Positions Inworld as the Best-Funded AI x Gaming Startup, and Accelerates Development of the Company’s Character Engine Currently Powering AI NPC Experiences from Team Miaozi (NetEase Games), Niantic, LG UPlus, Alpine Electronics, and more

Inworld AI, the leading Character Engine for games and interactive experiences, has raised new funding from Lightspeed Venture Partners—bringing the new valuation of the company to over $500M. The round includes additional investments from Stanford University, Samsung Next and new and existing strategic investors such as Microsoft’s M12 fund, First Spark Ventures co-founded by Eric Schmidt, and LG Technology Ventures.

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“Inworld’s commitment to open source is a testament to our belief that collaboration fuels innovation”

With over $100 million in total funding, the company is now the best-funded startup at the intersection of AI and gaming. The company will use the funding to accelerate research and development, hire top talent, invest in infrastructure, and launch an open-source version of its Character Engine. “Inworld’s commitment to open source is a testament to our belief that collaboration fuels innovation,” said Michael Ermolenko, CTO and co-founder of Inworld. “Working with the open source developer community, we’ll push forward innovations in generative AI that elevate the entire gaming industry.” Developers can learn more at inworld.ai/open-source.

The new investment comes on the back of the company’s AI-driven non-player character (NPC) experiences with Team Miaozi (NetEase Games), Niantic 8th Wall, LG UPlus, Alpine Electronics, and in community-created mods of Skyrim, Stardew Valley, and Grand Theft Auto V. At the 2022 Disney Accelerator Demo Day, Inworld demonstrated a ‘Droid Maker’ prototype that the company created in collaboration with ILM Immersive. Demos are available at inworld.ai/experiences.

“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.

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“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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