'A massive, massive moment of wow.' Microsoft CEO predicts AI-generated games are a 'CGI moment' for the industry

Microsoft's new AI-powered game generation platform Muse is akin to the impact that CGI had on the film industry. So, says CEO Satya Nadella in a wide ranging interview covering everything from AI and quantum computing, to the future of economic growth, while slightly ignoring the fact that Microsoft's AI-generated games are only running at a resolution of 300 by 180 pixels. Hold that thought.

Aside from such trivialities as quantum computing and economic growth, what does one of the world's most powerful CEOs think about the impact of AI on PC gaming? "That to me is a massive, massive moment of wow. It's like the first time we saw ChatGPT complete sentences," says Nadella of Muse in the interview.

What's Muse? Why it's the the first World and Human Action Model (WHAM), a generative AI model of a video game that can generate game visuals, controller actions, or both.

You can read Microsoft's own explanation of what Muse is here. But it seems to boil down to that borderline dystopian notion of sauntering up to your keyboard, spooling up your AI buddy and asking, "hey, I wanna play a first-person shooter with aliens set in ancient Rome, me as India Jones, and a comedy narrative inspired by Monty Python," hitting enter and having it actually happen there and then.

Actually, the main impediment to a scenario like that at this stage might well be IP and copyright, though when has that ever gotten in the way of AI progress... but I digress. Although Muse is just a research platform for now, Nadella thinks its impact on real-world gaming is just around the corner.

"What I'm excited about is bringing a catalogue of games soon that we are going to train these models to generate and then start playing them," he says, adding, "it's kinda like the CGI moment even for gaming long term."

He also emphasised just how special a status gaming has at Microsoft. "We didn't invest in gaming to build models. Here's the interesting thing, we built our first game before we built Windows (Microsoft Flight Simulator was 1982), Flight Simulator was a product long before we even built Windows. Gaming has got a long history at the company and we want to be in gaming for gaming's sake," Nadella explained.

He also explained quite a few other things, such as how he will measure the success and impact of AI not on some floaty notion of AI becoming self aware or achieving AGI or Aritificail General Intelligence, but on the impact it has on economics and therefore people's lives, in short solving what he sees as the world's current "growth challenge".

"We get a little ahead of ourselves with this AGI hype. The first thing we have to observe is GDP growth," he says. "The developed world is what, 2% growth, and if you adjust for inflation it's zero.

"Let's have that industrial revolution type of growth, that means to me 10%, 7% growth, the developed world inflation adjusted growing at 5%, that's the real marker. It can't just be supply side."

It's also interesting to note that Nadella doesn't seem to have monopolistic instincts when he talks about Microsoft's business. For instance, he doesn't see AI generally as a winner-takes-all industry, where a single player will come to dominate, perhaps as Google has in search.

Instead, he says he likes to enter categories that are so big, there's less risk of winner-takes-all happening, the kind of "big market that can accommodate a couple of winners, and you're one of them."

Anyway, exactly when we might expect to be able to, well muse on what imagined game we might like to play next to an AI agent, only for that exact game to fire up is unclear. While it seems like that or something close to it is on its way, as we pointed out earlier in the week, some observers think Muse is being over hyped.

Dr. Michael Cook, an AI researcher, game designer, and senior lecturer at King's College London, for instance, says that Muse, "is not really about 'generating gameplay' or 'ideas'," but rather, "a study of how human designers think about working with generative AI tools."

Moreover, Muse games are currently being generated at a resolution of just 300 by 180 pixels. So, it's not exactly threatening that hand-coded 4K experience, yet.

And yet, the very idea that an AI might dream up an entire game is a rather astounding prospect. Personally, I have no idea what to think about it all. It's kind of thrilling, but it's also thoroughly unsettling. Let us know what you think below.