Edmonton-based Artificial Agency has emerged from stealth and closed more than $17 million CAD ($12.5 million USD) in seed funding to develop its artificial intelligence (AI)-powered “behaviour engine” for video games.
Over the past year or so, Artifical Agency has been quietly building a solution that allows developers to embed generative AI into video games, with the hope of creating more interactive, personalized storytelling and gameplay. The AI gaming company’s tech is designed to power in-game interactions between human players and non-player characters (NPCs) and systems.
Artificial Agency was founded in 2023 by CEO Brian Tanner, Alex Kearney, Andrew Butcher, and Mike Johanson, four former Alberta-based researchers at Google parent company Alphabet’s AI lab, DeepMind.
Artificial Agency is building its system in collaboration with major video game developers.
“We’ve always had this really strong passion for the games industry and always wished that we could find a way to take some of the cutting-edge stuff that we’ve been working on and really bring it out of the lab into the industry,” Tanner told BetaKit in an interview.
The emergence of generative AI—and the shuttering of DeepMind’s Alberta office amid broader layoffs at Google—spurred the group to team up and they secured $5 million CAD ($3.7 million USD) in previously unannounced equity pre-seed funding led by Toronto AI investor Radical Ventures in April 2023. This round was supported by two entertainment and gaming-focused venture capital firms in New York’s Tirta Ventures and Czechia-based Kaya VC, and angel investors.
Now, armed with $17 million CAD in fresh seed financing and a team with experience in AI and gaming, Artificial Agency is ready to announce its presence and share more about what it is developing as the startup gears up to bring its product to market.
Artificial Agency’s seed round, which was first reported on by The Logic in May, closed in June. Radical co-led it alongside new, Japanese-based investor Toyota Ventures, which recently unveiled a new fund for early-stage AI startups.
The financing saw participation from two other new backers including Seattle-based AI investor Flying Fish VC and BDC Capital’s Deep Tech Fund, with follow-on support from Tirta and Kaya. Approximately $1.4 million CAD was a convertible note issued between the two rounds, and the remainder was equity. Tanner indicated that Artificial Agency’s seed round was an up round, but declined to disclose the startup’s valuation.
This latest round brings Artificial Agency’s total funding to approximately $22 million CAD, from a group that also includes Canadian AI leaders and University of Alberta professors Richard Sutton and Michael Bowling.
“Artificial Agency is led by my former students and colleagues—people I know well,” Sutton, also a former distinguished research scientist at DeepMind, said in a statement. “They are the best in the world at using reinforcement learning and foundation models to create complex, lifelike, and purposive agents.”
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In an interview with BetaKit, Radical Ventures principal Daniel Mulet described Artificial Agency as “a team of people who have spent a lot of time both pushing the frontiers of deep learning and reinforcement learning, have experience in industry—so they have founder-market fit, let’s call it—combined with a vision that really felt transformative.”
Artificial Agency spent most of 2023 developing a prototype to prove they could build an AI system that could be hooked up to a commercial game and immediately begin making behavioural decisions. While they had strong conviction this was possible based on what they had seen in academia, Kearney claimed to BetaKit that this was “something that no one had done.”
Making NPCs engage and react to players in the way they do in expansive, open-world games like Grand Theft Auto and Red Dead Redemption typically requires developers to envision all of the possible things that could happen, and create a complex flowchart, Tanner said. “That’s a very laborious process, it takes a lot of time, it’s hard to test, and if you haven’t anticipated something, you can’t really have an engaging reaction to it.”
Artificial Agency aims to augment or replace some of this work with its AI-powered behaviour engine, which is capable of perceiving and reacting to player’s comments, actions, and other factors. Artificial Agency claims its tech can be embedded inside existing games, unfinished ones, and games in early development, and customized to suit developers’ needs. Kearney and Tanner demonstrated a taste of what its tech is currently capable of to BetaKit during a short, live demonstration that applied its behaviour engine to an NPC in Minecraft.
Kearney is proud of the quality of the games industry talent that Artificial Agency has been able to lure to the AI gaming startup. On this front, Tanner hopes to ensure that Artificial Agency succeeds where some others have failed. “There’s a long history of people from deep tech going into the games industry and proclaiming that they’re going to change everything,” he said.
Building a company with deep experience in not just AI, but also gaming, has been a focus for Artificial Agency, which has amassed a 20-person team that fits this bill. “The games industry has so many distinct challenges and nuances that regular tech startups don’t run into, that having a team with that strong games background and AI background in the DNA has been really critical for us to find early traction with early customers,” Tanner said.
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Artificial Agency has been building its system in close collaboration with several undisclosed major video game developers and plans to make it widely available in 2025. Artificial Agency’s early design partners include large gaming studios with complicated technical challenges, Tanner said.
Tanner believes Artificial Agency’s behaviour engine could allow developers to build video games faster and “get more shots on goal,” which would prove beneficial in a hit-driven industry. Kearney singled out the possibility for it to empower smaller, independent studios to build more complex open-world games and punch above their weight. For his part, Mulet sees potential for Artificial Agency’s engine to enable the creation of new categories of games.
Asked how the company’s tech might impact gaming industry workforces over the long run, Tanner noted that while there is a lot in the generative AI space that will negatively affect employment in various sectors, he claimed that game designers to whom Artificial Agency has demonstrated its tech have been more excited about what it makes possible.
“What we hear them saying is not, ‘This is going to take my job away,’” said Tanner. “They say, ‘This is going to allow me to do things in games that I’ve always wanted to do, but it was impossible because of the way that we had to dynamically script characters in the past.’”
Feature image courtesy Artificial Agency.
