I can imagine a point where AI is so advanced and integrated into games that it could literally recode the game in real time, readapting everything to the player’s choices. That would even eliminate problems like static characters sitting around the house, because every line, every bit of dialogue from them would be unique and variable depending on when you interact. Even sex scenes, blowjobs, whatever, all of it would have unique lines and unique variations for each player. That would be the peak of this kind of game.
Yeah, this is sort of the hoped-for goal when people talk about having AI run games as essentially your own private Dungeon Master. Using preexisting assets, code, and narrative, but being able to adapt on the fly to whatever choices you make, so you can literally make ANY choice. Every time someone complains that you can't say "X" in any given dialogue (ie, "I wanted to tell her to go fuck herself, but the game didn't give me the option!"), in theory an AI could go "Okay, so you say that, and this is how they react."
The problem is, AI is nowhere near that good right now. And likely won't be for a very long time (if ever). So people trying to force AI into games are mostly going to wind up with a garbled mess at best. It can be an effective tool if used properly, but right now it can only do some things, not
everything.
That's the biggest problem with AI in general at the moment. Not "Oh my god some artists might lose their jobs", but "Tech companies who have no real idea what they fuck they're doing are investing billions and ramming AI into literally everything they can, no matter how poorly suited or pointless it is, so everything winds up being way shittier than it was a few years ago."