What Are AI Avatars: A Guide to Intelligent Virtual Beings

XR TechAIJun 29, 2022
What Are AI Avatars

From virtual goods to burgeoning new digital worlds, technology is again pushing the boundaries of human experience into unchartered territory.

Many of us have recently faced a deluge of buzzwords like Web 3.0, blockchain, cryptocurrencies and, of course, the metaverse. And while much of it might seem incomprehensible for now, they’re not to be discarded as another tech fad.

In particular, the recent progress in the field of artificial intelligence is opening up new opportunities that are sure to greatly impact human experience in the upcoming era of virtual worlds, also known as the metaverse.

While in the past, AI helped machines carry out routine manual tasks, the technology can now also perform certain cognitive work thanks to its ability to learn, improve through experience and ultimately mimic human behaviors.

Not only that, but the rapid expansion of cheap and powerful computing power has seen the massive digitalization of world objects and processes. More recently, humans themselves are being digitized in the form of virtual avatars.

And artificial intelligence is giving a new meaning to the creation of virtual people by pushing the boundaries of technology to yet again a new frontier - AI lifeforms.

AI-powered avatars can serve endless purposes, from being hired out by real-world companies to teach new employees, to serving as trusted confidantes in the metaverse, to name just a few use cases.

Emerging virtual worlds, and their profitable economies, already encompass some 2.5 billion people, according to market research company L'Atelier.

Moving forward, the world will only become more virtual and humans are increasingly going to live in the metaverse, side by side with AI-driven virtual beings.

With that in mind, we’ll be having a closer look at what sharing our online experiences with artificial intelligent avatars will look like and how it could change the world as we know it.

What Is An AI Avatar?

We have long dreamed of intelligent virtual beings in science fiction literature and movies, but they’re now finally coming to life.

So, what is this all about?

An AI avatar is a digital character, powered by artificial intelligence, that lives in a virtual setting, like a game, social network, dating app or online world.

These types of avatars can take many shapes, but they are more frequently designed as human-like bots that can easily engage with “real humans” and maintain a relationship - to varying degrees - with them.

They are also a step up from the omnipresent AI chatbots, which also rely on artificial intelligence to simulate human communication. Chat bots have advanced greatly in the last three decades. Kuki AI, formerly known as Mitsuku, is presently one of the best chatbot platforms, having won the prestigious Loebner Prize for “humanlike behavior” four times in a row.

However, no matter how advanced they might be, AI chatbots lack long-term memory; they can’t recall past dialogues and the specifics of the people they’ve engaged with. Instead, they’re simply trained to reply within the context of the lastest dialogue history.

AI avatars, on the other hand, come with powerful capabilities, including memory, emotions and creativity.

We can generally break down types of avatars in the following way:


Sims Avatars

Broadly speaking, avatars are the replication of a user or object in a virtual environment. They can be anything from cartoon-like characters to more sophisticated animated designs. These types of virtual beings can also be a three-dimensional image in an online game or virtual world, or a two-dimensional image commonly used in social networks, forums and online communities.

More recently, avatars have been described as digital twins, digital humans or virtual doubles, in the context where they serve as an extension of the identity of a real life human entity. We’re now seeing the development of increasingly complex virtual human replicas, created through computer graphics and motion capture.

What is important to note is that traditional avatars are controlled and managed by humans, regardless of the context. These characters are a familiar sight in the world of gaming, for example, but they’re also now being used by businesses to ease some processes like responding to queries and training new staff.

These digital twins can be particularly helpful in lending humans more realistic, immersive and “present” experiences to humans navigating through a virtual environment. In the metaverse, for example, users and their avatars are able to see, hear, feel and have a meaningful interaction with the elements of a virtual world thanks to the combination of XR technologies.

AI Avatars

Alethea AI Avatars

Leveraging advanced AI models, for example, Natural Language Processing (NLP) algorithms, to its advantage, artificial intelligence avatars are a totally different breed of humanoids that don’t rely on a human agency to live independently in a virtual world. This means that they can have their own backstory and personality, and easily interact with human users in real-time.

The AI Foundation, one of the world’s leading AI companies, has described these types of virtual beings as “a digital representation of you, just like a video or a photo, but with intelligence…The AI can go back to you and say, hey, I had one thousand conversations with people today. This is an aggregate of what people are asking, what they are thinking, what they want to know.”

Social AI Avatars

Sensorium Galaxy Metaverse AI Avatars

A step up from traditional AI avatars comes in the form of social AI Avatars, pioneered by Sensorium Galaxy. These avatars have the unique capability of supporting complex and unscripted conversations based on their unique personality and the self-learning built through interactions with others in virtual environments, in this case the Sensorium Galaxy metaverse.

Not only that, but these highly complex avatars possess both long and short-term memory, allowing them to hold a long conversation without ever losing context. Unlike a chatbot, they can track peculiarities like the background, personality, speaking style and interests of the person they’re talking to, which helps them continually evolve and form memories from their interactions.

In the case of Sensorium, the technology underpinning this comes from fluxCortex Azu, a next-generation evolving AI hybrid architecture based on genetic algorithms and reinforcement learning and developed by Temporal Games. This technology utilizes Open AI’s GPT-3 and some additional custom language models and ensures that AI responses remain consistent, factual, and accurately express the individuality behind AI characters.

Moreover, when assembling and customizing their virtual beings, Sensorium Galaxy users can look at mixing specific traits that are part of a “mind pyramid”.

Sensorium Galaxy Metaverse Avatar Mind Pyramid

Overall, Sensorium’s social AI avatars mark a new milestone in the advancement of сonversational AI, raising the bar from chat-bots and traditional non-player characters to ever-evolving human-like conversations.

Taking it even further, these avatars can take on the role of content creators as virtual DJs capable of generating a constant flow of ever-changing music in 60+ genres. Each artist has their own signature performance style and a unique personality, and when off-stage, they’re permanently available to communicate with fans via text chats and video calls through the Sensorium Galaxy mobile app.

Wandering around Sensorium’s worlds they will serve as users’ trusted virtual companions and confidants as well as personal metaverse’s guides.

As mentioned before, social AI avatars are capable of striking up meaningful conversations - and ultimately relationships - with humans thanks to being trained on language models that pull data from large swathes of texts available on the internet like online encyclopedias, blogs, news and other publicly available sources. Language models are what makes the virtual beings knowledgeable and what drives the creativity in their conversations.

LaMDA, which stands for "Language Model for Dialog Applications," is one of such AI systems that helps virtual humanoids find patterns and predict words that could come next in an interaction.

As a result, avatars are becoming increasingly adept at answering questions and speaking on a number of topics in a way that can seem convincingly human.

The Technology Behind AI Avatars

Machines are becoming better listeners - and learners. They can now engage in complex thought processes and closely resemble human behavior across a number of functions.

Chatbots and virtual assistants like Alexa and Siri are an invisible part of our environment, whether in our homes, workplaces, cars or even in smallest wearable devices like the watch we carry on our wrist everyday.

And technology continues evolving into exciting new directions. Deep learning - a subset of machine learning - now lets machines understand conversations, simultaneously translate into any language and independently recognize faces and objects.

Other advancements include forms of voice control and sensors that read brain waves and transform the sound waves on our skin into machine-readable text.

But all of this is just scratching the surface of the potential of AI.

When it comes to outfitting AI avatars and creating their “brains”, there are core technologies employed to improve their capabilities, including:

Machine Learning

Using past data and experiences without any explicit programming or supervisions, machine learning enables the detection of human emotions and self-improvement.

Natural Language Processing (NLP)

Allows avatars to understand and process commands. In other words, NLP is what makes human language ‘understandable’ to computers by breaking down natural language into smaller elements so that a machine is able to understand how they work together.

Natural Language Generation (NLG)

It helps AI avatars take data and transform it into language that sounds perfectly natural. So natural in fact that it comes across as if a human was speaking or writing the content.

Advanced 3D Modeling

This technology enables the visualization and creation of hyper-realistic virtual beings that can reproduce the particularities of human facial expressions and body movements. 3D modeling can be paired with motion capture.

Next-Gen artificial intelligence development is also benefiting from technology still under development.

Currently, most avatars are closer to resembling cartoons rather than real humans and they also lack the animation that would make their movements realistic. For that reason, Meta has bet on software capable of learning about the musculoskeletal system of the human body and applying it to AI avatars in the metaverse so that they’ll be able to mimic complex movements and simulate the interaction of human muscles, bones and joints.

Epic Games, the developer behind hit titles like Fornite, Infinity Blade and Grand Theft Auto, has also recently unveiled its MetaHuman creator toolkit that enables the creation of highly photorealistic avatars. And we mean eerily realistic. Don’t believe us? See it for yourself.

What Can AI Avatars Be Used For

Companies are resorting to AI avatars for a number of purposes.

Nowadays, they’re used mostly in marketing, ecommerce and customer service. Deepbrain, a leading AI startup, offers a vast line of AI-powered lifeforms that can fulfill a wide range of occupations across industries like retail and commerce, financial services, education and media. Customer-facing avatars are a particular popular replacement for their human counterparts in roles including store clerks, receptionists, travel guides and bank tellers.

The Covid-19 pandemic provided an added incentive for the use of this technology, leading to the rise of the concept of “virtual people” or “synthetic humans”. Companies including Soul Machines, Brud, NVIDIA, Samsung’s NEON and the AI Foundation are dedicating efforts to furthering the potentialities of these types of avatars that can mimic the experience of interacting with human beings.

For instance, Samsung’s STAR Labs has developed next-generation personal assistants, under the NEON AI project, that look and act like real humans. They’re able to answer questions and entertain users in better ways than traditional AI assistants like Apple’s Siri or Amazon’s Alexa.

 NEON Avatars

The Neons include simulations of a news anchor, a K-Pop star, a yoga instructor and a fashion model, and in the future it will be possible to use these AI humanoids as financial advisors, health care providers or as a concierge. The company has further revealed that “over time, NEONs will work as TV anchors, spokespeople, or movie actors; or they can simply be companions and friends.”

Microsoft and IBM are some of the other big tech giants already offering virtual avatars and applying them across their businesses.

Apart from creating digital characters for online interfaces, AI startup Soul Machines develops next-generation digital twins of real-life celebrities like American-Indian author Deepak Chopra and artist, as a new way of reaching digital audiences and establishing one-on-one relationships with fans.

The digital-human avatar market size was a little over $10 billion in 2020, according to Emergen Research, but the figure is forecast to balloon into $527.6 billion by 2030.

Clearly, there’s plenty of room to work with here - and tech companies are rightfully taking notice.

Here are some of the many other potential applications of AI avatars:


An industry already known for embracing technological experiments and advancements, gaming can undoubtedly benefit from using artificial intelligence humanoids as it can lead to enhanced gaming experiences. A recent study has indicated that experienced gamers are open to expressing themselves in a virtual environment through a human-like avatar which could help them improve their performance while also reducing the number of hours spent online. Chinese tech giant NetEase has been making a significant investment in this area, allowing players to create avatars from selfies among other AI-based capabilities that can be integrated into the gaming industry.


Your next favorite entertainer might very well be an AI personality. In fact, the world of AI artists is already a massive business in many Asian countries, particularly in China and Japan, where virtual idols (as they’re known) can attract millions of followers. These idols can have many personas such as being influencers, broadcasters and singers. One of the most popular virtual idols in China, Liu Yexi, has managed to earn more than 2.8 million followers alone on China’s version of TikTok, while many other AI influencers can be frequently seen fronting campaigns for the likes of Tesla, Louis Vuitton and Burberry.

Different types of AI-powered technology are employed to create these life-like virtual beings including natural language recognition, voice interaction and intelligent recommendation, but the majority of these popular personalities are yet to be fully controlled by AI.

However, Sensorium is pioneering AI artists like Kàra Màr, who are fully autonomous, capable of generating their own music and available to interact with fans anytime.

Training and Education

Companies can benefit from using AI avatars for employee training while educational institutions will see potential in delegating student learning to these characters.

An obvious upside would be cost reduction and performance improvement. Corporate training and mentoring can be taken over by avatars in areas such as sales, customer support, call centers and business management.

Based on their neural networks, AI avatars can easily communicate with humans and make predictions based on previous interactions, which can be useful in scenarios like presentations and handling queries during training sessions.

London’s software startup Synthesia (tagline: realistic, but not real) currently offers a raft of AI avatars that can undertake product demonstrations and sales videos for enterprise clients, across a staggering 50 languages. Users simply have to type a script, add components including text, images, and shapes, and the platform will generate a video rapidly with custom backgrounds and an avatar that mimics a person’s facial movements.

Elsewhere, the use of AI avatars is also being studied in educational settings as a potential tool in helping teach social and interaction skills to children with autism and other special needs.


We might live in the digital age but studies have shown time and time again a correlation between time spent online - particularly on social media - and loneliness.

This is where AI avatars can step in. Conversational AI has become complex enough that virtual beings can now convincingly hold conversations with humans while displaying a wide range of emotions, from empathy to warmth and happiness.

Interacting with a virtual AI companion can potentially help address feelings of loneliness and isolation - and even enhance human interaction.

Or maybe you’ll just find yourself needing someone to talk to and get things off your chest. Why not confide in a human-like avatar that can not only listen to you without judgment but also hold conversations about virtually any topic. Another bonus? You don’t even need to leave your house to find new friends.

AI Avatars And The Metaverse

The metaverse is an emerging concept that refers to interconnected 3D virtual worlds where our physical and digital lives converge.

Thanks to technologies including virtual and augmented reality, blockchain and artificial intelligence, entering the metaverse can be a deeply immersive experience and a place where we will be able to carry out our routines like working, socializing, attending events and meeting new people, while also entering a whole new world of digital experiences. Some of them we can’t even name as they are yet to be conceptualized and developed.

In the past, people’s experiences of virtual reality may have been clunky, but fortunately both the hardware and the software are evolving each day and becoming more sophisticated and convincing more users to give it a try. And from there, an increasingly bigger number of people will find themselves entering the metaverse.

In these digital settings, users are given an avatar - a representation of themselves that they can tweak however they like. This will depend on the platform, of course, and users can typically opt for a high-fidelity avatar or an entirely new identity. Sounds familiar? It sure does. That’s because most of us on the internet will have had an avatar at some point.

The video game industry in particular has pioneered the use of avatars and is now helping usher in a new era where avatars play a central role in the metaverse.

Titles like Roblox, Minecraft and Fornite are helping lay the foundations for the development of the metaverse and, in the process of attracting millions of players to their platforms, contributing to the normalization of the use of avatars.

Meanwhile, avatar-based social apps, such as ZEPETO and BUD, are recording record-high global interest, further underscoring the broadening appetite for the technology.

Besides avatars, created and managed by humans, there are AI avatars that are completely independent from any human agency. They will already be a part of the metaverse, moving, exploring and engaging with others on their own.

Inside Sensorium Galaxy’s metaverse, AI-driven virtual beings are capable of having many roles, from being a popular DJ holding performances to immense crowds to becoming a trusted friend and companion to users as they travel between the worlds inside this metaverse.

Users can also choose to create their own Ai avatars with an AI configurator - the Mind Pyramid.

The advantages of bringing intelligent lifeforms to a metaverse are many-fold and many yet to be imagined or explored. However, immediate benefits include:

Immersion: Digital avatars will allow users to have a continuous presence inside virtual worlds. Unlike regular virtual agents, AI avatars are also meant to interact with users beyond simple information sharing. We can imagine them being created, for instance, for companionship. These life-like experiences would help take virtual worlds to another level of immersion and enable more meaningful experiences online.

Ubiquity: A 24/7 virtual presence means that people would be able to delegate part of their virtual lives or even jobs to their intelligent replicas. An example would be an artist performing inside a virtual world but not being impacted by time zones.

In essence, AI lifeforms are an exciting enhancement to virtual environments, challenging the current limitations of digital life.

AI Regulation

The metaverse might be in its infancy but against the backdrop of global hype over the technology, concerns over regulation are already emerging.

There's no doubt that the existence of fully autonomous intelligent virtual beings poses a raft of legal and regulatory entanglements that must be examined.

From data consent to privacy, cybersecurity, antitrust, intellectual property rights and financial regulation, metaverse-related platforms ought to consider the legal challenges that might arise from using AI and developing AI-driven beings.

For now, authorities are zooming in on the wider scope of artificial intelligence, with the issue drawing attention from policymakers in both the European Union and China, each looking to reign in the tech.

At the beginning of this year, China’s Cyberspace Administration of China (CAC) rolled out an ambitious set of rules for tech, making it mandatory for companies to inform users if an algorithm is being used to display certain information to them and allowing people to choose to opt out of being targeted. Further AI regulation being enforced by Beijing includes a strict oversight of services with “public opinion and social mobilization capacities” and the ethical use of recommendation algorithms.

The European Union is currently discussing its own Artificial Intelligence Act, an all-encompassing framework based on the level of risk of AI technology, defined in four categories: minimal, limited, high and unacceptable.

The bloc has also been floating regulatory control over the metaverse, with Executive Vice President of the European Commission Margrethe Vestager saying that earlier this year that “the metaverse is here already. So of course we start analyzing what will be the role for a regulator, what is the role for our legislature”.

Bottom Line

AI technology is becoming ever more complex and, like it or not, this also means that we’ll have to contend with the idea of living our digital lives shoulder to shoulder with artificial intelligent beings.

As they’re quickly going from being the stuff of sci-fi books to a sure thing of real-life, the first generation AI avatars are already proving to be capable companions and entertainers in the metaverse, paving the way for even greater capabilities in the near future.

In the next decade, they’re likely to become commonplace - and embraced as valuable digital neighbors that will ease human transition into virtual worlds.

Rachel Breia
Rachel Breia
Senior Content Manager

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