AI As The Driving Force For Metaverse Adoption: A Conversation Looking Towards Transformation

Despite recent media headlines exclaiming the end to the Metaverse, calling it a short-lived technological innovation that went nowhere, prospects are potentially looking to shape up once again, as Artificial Intelligence (AI) is now helping companies break through the once-believed glass ceiling and giving them a new perspective of where the metaverse could be going.

In the past months, the buzz surrounding AI has focused mostly on the increasing number of applications for sophisticated language models such as GPT-4 by OpenAI. Yet, those applications seem to be only grasping the surface of what AI can do.

Yes, there’s more to it than generating Excel formulas, fixing code, and rewriting emails. Swiss startup Sensorium is pioneering AI integration into the metaverse, populating their multiplayer virtual worlds with an entire colony of AI-driven virtual beings users can interact with.

In an exclusive interview with Ivan Nikitin, Sensorium's Chief Metaverse Officer, we discussed how the company is helping to transform the metaverse through creating cognitive virtual beings, and their groundbreaking Salvador Dali experience, which offers users an intimate and authentic connection with the legendary artist.

  • Transformation Through Innovative AI Collaboration

In an echo of the early 1980s, when Online Service giants like AOL, CompuServe, and Prodigy were the harbingers of the Internet era, a variety of companies today are shaping the contours of the Metaverse. Each one is developing its unique blueprint, setting the stage for the next-generation spatial Internet.

Despite the current state of the Metaverse being as fragmented as the early Internet, it's the shared ambition of these companies to form the foundational standard for this emergent virtual reality.

Although these parallels stretch back more than four decades, the last several years have witnessed a soaring interest in the metaverse, which even led Mark Zuckerberg to rename his trillion-dollar company to Meta (NASDAQ:META) back in 2021.

Despite seeing mainstream adoption in the early 2020s, a shift in technological interest among consumers and companies, and the rise of AI applications has enticed many with a more promising future.

Perhaps true to the extent based on real-world uses, there’s however a new opportunity that can help restart how the metaverse could change the way we work, socialize and communicate within the virtual ecosystem.

Nikitin says that several advancements in 3D graphics, VR/MR, and AI have greatly improved the metaverse experience, although applications remain niche in their respective domains.

“Widespread adoption is being achieved through continuous technological refinement and user testing, while the content pipeline transformation, driven by Generative AI, is lowering entry barriers for emerging 3D content creators and virtual world developers, promoting further innovation and growth in the field,” says Nikitin.

While both Artificial Intelligence and the metaverse function as separate domains, against the backdrop of broader technological advances, a combination of both could help become a cross-test of various digital solutions within the consumer and commercial marketplace.

Legacy tech companies such as Hewlett Packard Enterprises (NYSE:HPQ) once had a key influence in the evolution of early technology systems. However, with the ever evolving tech landscape, HPE is now building upon earlier developments of both AI and the metaverse; leading the company to develop AI application tools that can be used within the metaverse itself.

Leveraging control over virtual environments opens a world of possibilities for companies. This control allows them to build immersive simulations, where users are active participants, not mere spectators.

These virtual realms serve as dynamic platforms for showcasing and testing novel projects, transcending the limitations of physical reality. User engagement in these spaces not only amplifies demonstrations but also provides real-time feedback, fostering innovation and refining future development.

  • Leveraging Generative AI To Accelerate Content Creation

The arrival of the metaverse has come with new opportunities to leverage the practical application of generative AI. By itself, generative AI has given way for users to interact and utilize digitally made content manufactured from different prompts, including text, and multimedia such as images or video.

Within the ecosystem of generative AI, major league names including Google’s Bard and Adobe Firefly's beta, which launched in March this year, further encourage the collaboration between tech giants to create digital public domains through which users can make practical use of advanced generative AI tools.

The likelihood of both Google (NASDAQ:GOOGL) and Adobe (NASDAQ:ADBE) now partnering to develop a software protocol that could see Adobe Firefly and Adobe Express becoming Bard’s premier photo generation software. This would enable users to create images with text through Google Bard, further enhancing text-to-image opportunities.

Against this backdrop however, it means that the metaverse could fully leverage generative AI, which could focus on addressing several challenges that metaverse products have encountered over its development years.

Instead of choosing user-generated content and professionally produced experiences, some developments could see companies focusing their attention on generative AI.

In some instances this has proven to be successful, allowing companies to leverage opportunities within the metaverse and to implement advanced generative AI applications along with it.

Examples of this see efforts trailed by the team at Sensorium seeing virtual worlds inhabited by diverse Social AI characters. Through the use of generative AI, companies will be able to accelerate content creation and deliver a more dynamic user experience.

“Our conversational experience surpasses even ChatGPT and its derivatives, with AI characters recognizing and responding to users' presence, fostering entertainment, emotional solace, and social skill-building in an immersive and visually-rich setting,” Nikitin shares.

Yet, despite these advancements, Nikitin underscores the current challenges that plague the broader metaverse industry, particularly in the realm of virtual events. Prior experiences, encompassing virtual concerts and live events, have often fallen short of the mark. This shortfall is primarily attributable to technological bottlenecks, including the lack of robust VR computing power and compromised visual fidelity.

This not only hindered users from finding more appeal in the metaverse, but it created barriers for this ecosystem to entice potential long-standing investors and exceptional talent, although efforts were once backed by ambitious ideas.

In the everyday world, creators and influencers are the driving force behind online digital media content. For the metaverse however, the potential likely lies with generative AI, as it has already showcased impressive capabilities in content creation and personalized curation.

This sort of attitude is changing, however. Ongoing commitment from technologically sophisticated sectors is helping different domains progress while propelling one another forward at the same time.

“Given the current pace of development, it is likely that we will soon witness a point of convergence where the metaverse, generative AI, and Web 3.0 seamlessly integrate, revolutionizing the internet as we know it today and the myriad businesses that rely on it,” Nikitin notably shares.

  • Furthering Investor Relations And Support For The Metaverse

While investors have clung to the successful growth of AI, based on rapid expansion within the marketplace despite big-tech companies' laying off droves of employees over the last several months, perhaps this could be the turning point that could help deepen investor interest in the metaverse.

Recent reports suggest that annual corporate investment in AI applications, tools, and systems is more than thirteen times greater than it was a decade ago. Another analysis shows that 63% of organizations are solidly prioritizing AI exploration above all other technologies.

Although this long-term outlook casts a shadow over what could potentially become the next generation in commercial technological adoption, a more diversified position could potentially give investors increased exposure to an array of evolving digital tools and systems.

“Metaverse-based projects have the potential to transform various industries, including gaming, entertainment, education, and e-commerce. As the scope of these applications broadens, investors stand to benefit from the rising demand and market value,” Nikitin says.

Investing in the metaverse doesn’t offer a singular approach. Following ongoing development could provide investors with numerous opportunities, including token investments, virtual real estate, and other in-platform assets, as projects increasingly adopt the Web 3.0 approach according to the team at Sensorium.

Using a more investor-committed approach could see companies in the metaverse industry position themselves to further develop strong technological solutions that could become defensible against strong industry-wide repetition. Given sufficient resources, whether financial or technological, the metaverse could change the way people work, learn and communicate, as deep technological systems become increasingly democratized.

“This could mean that by transcending its entertainment origins, the metaverse can significantly impact various industries and facets of everyday life. Turning to cross-platform expansion to widen the addressable market for high-quality metaverse experiences.”

  • Navigating Difficulties

It’s hard to ignore ongoing economic challenges facing a myriad of industries globally, especially in semi-prominent industries such as information technology which has seen venture capital activity drying up since the start of last year.

These difficulties do place companies under pressure to ensure forward-looking guidance is aimed at creating digital systems and tools that entice commercial, institutional, and retail investors while seeing user acceptance steadily grow over time.

In a time where overall interest has been largely varied among consumers, it’s hard to predict what the future could look like.

For the companies invested in the development of the metaverse it helps to create a new pace of direction. Through this, companies can focus on creating attractive content, and welcoming new users into the virtual ecosystem. With ongoing deployment of different projects, companies can thus offer multiple tiers of access further broadening their reach across different markets.

“We’re already rethinking how we can use some of our most accessible tiers, especially 360-degree streaming, that allows virtually any user to experience a metaverse show. Providing a greater touch of interactivity, and ultimately leading to the full scope of VR immersion, leads users to actively contribute to metaverse events and experiences.”

Virtual events can serve as an experimental funnel, helping to demonstrate the potential of metaverse technology, leading to greater encouragement among users.

Not only are virtual events drawing major attention, but they’re also becoming graphically advanced, with headlining performers throwing their support behind these digital events.

"After months of public playtesting, we are gearing up to host one of our first world-class performers on the virtual stage: Carl Cox, who will perform in Sensorium Galaxy this summer in the most graphically advanced Metaverse event to date," shared Nikitin during our conversation.

The forthcoming performance by Carl Cox is not a standalone spectacle. Sensorium has been actively recruiting a roster of celebrated artists for their metaverse performances, a lineup that boasts names like David Guetta, Armin van Buuren, and Steve Aoki. As pointed out by Nikitin, the sizable fanbases of these artists are expected to act as a catalyst, driving the adoption of immersive content.

This is one of several examples that shows how two different parallels are crossing at an inflection point, with well-known performers and artists expected to act as a catalyst, helping to further fuel the adoption of immersive content.

“Through these efforts, we’re able to address the chicken-and-egg dilemma in the VR industry and ensure a wider audience can participate in and appreciate the possibilities of virtual reality.”

This serves as a steady blueprint that enables them to capture both user and investor-oriented consumers, once again highlighting how ingenuity and innovative collaboration can help propel different technological facets towards the next generation of mainstream adoption.

“We expect a diverse global audience, including gamers, ravers, music aficionados, and tech enthusiasts, who can access the event via VR, standard PCs, or mobile phones through a 360 stream. In an unprecedented fusion of AI and humanity, our esteemed Virtual Beings will also join the party, making this the world's first collaborative event between artificial intelligence and human beings.”

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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