In theory, I get the appeal of an NPC powered by AI. What if Lydia from Skyrim could talk endlessly about topics other than your shared inventory and could offer more than the handful of phrases she shouts at enemy bandits? I like the idea of characters whose interactions don't end just because their scripts do. It's an intriguing concept.
The reality is that, at least for now, the AI solutions I've seen just don't work all that well. AI-powered NPCs can talk and talk and talk, that's for damn sure. But they're not saying anything worth listening to.
