Microsoft is partnering with Inworld AI to develop Xbox generative AI tools, showcasing how AI is being used in addition to business digital transformation

Microsoft is partnering with Inworld AI to create Xbox game development tools for Generative AI characters and storylines.

Through this partnership, Microsoft aims to develop Xbox tools that will allow developers to create AI-powered characters, stories and quests. This multi-year partnership will also include an “AI design copilot” system that Xbox developers can use to create detailed scripts, dialogue trees, quest lines and much more.

The multiplatform AI toolset will include the AI design copilot for scripts and dialogue, as well as an AI character engine that can be integrated into games.

Generative AI in gaming: The metaverse expands

As game creators have begun experimenting with AI Large Language Models (LLMs) much like OpenAI’s GPT (the AI that powers ChatGPT and Bing Chat), Microsoft’s Xbox has seen opportunities to accelerate game developer creativity, reduce complexity and enhance player experiences.

AI is being used far more frequently within the games industry, as it can help to provide improvements and more immersive interactions within the metaverse. In particular, visual and augmented reality (VR/AR) adoption, as well as virtual 3D, could cause the industry to swell to US$615bn by 2030. 

It is therefore easy to see how digital systems like generative AI can work to create a more immersive digital world for gamers and other users of technology worldwide.

“AI has long been an integral part of game development, with applications ranging from enemy AI to procedural generation,” says Ilya Gelfenbeyn, CEO of Inworld AI. “The emergence of large language models and generative AI has unlocked new opportunities for storytelling and character engagement within games.”

This partnership will bring together Inworld’s expertise in working with Generative AI models for character development within gaming, Microsoft’s cutting-edge cloud-based AI solutions including Azure OpenAI Service, Microsoft Research’s technical insights into the future of play, as well as Team Xbox’s strengths in revolutionising accessible and responsible creator tools for all developers.

Together, both companies are aiming to deliver an accessible, responsibly designed multi-platform AI toolset to assist and empower creators in dialogue, story and quest design.

From business development to gaming: Unlocking AI’s full potential

This comes in the wake of Microsoft having introduced its new AI-driven Office assistant, Copilot, aiming to revolutionise business operations by creating emails and condensing documents. Microsoft is the first company to make chatbot technology available as a standard feature in its software, marking a trial to determine whether businesses are willing to invest in AI.

As with all creator tools at Xbox, its goal is to deliver state-of-the-art AI tools for game developers of any size, anywhere in the world and on every platform where players want to play. Xbox says that it will also continue to collaborate and innovate within game creators ATM138 inside Xbox studios as well as third-party studios as it develops tools to inspire new possibilities for future games and improve player experience.

“Our approach to AI is based on three principles: meaningful innovation, empowering people and organisations, and responsibility,” says Haiyan Zhang, General Manager of Gaming AI, Xbox. “We are committed to creating responsible AI by design, building on Microsoft’s AI principles and Microsoft’s Responsible AI Standard. And we continue our ongoing commitment to bring intentional, inclusive practices and thinking to everything we do at Xbox.”

She continues: “Partnering with Inworld is an important step in our journey to empower game developers. We look forward to sharing more as we empower game creation with AI.”

Anthropic CEO Dario Amodei warns that rapid advances in AI could eliminate up to 50% of all entry-level white-collar jobs within the next five years

Dario Amodei, CEO of Anthropic has warned that AI technology could eliminate half of all entry-level white-collar positions within the next five years.

The prediction suggests unemployment could reach 10-20% as AI systems transition from augmenting human work to replacing it entirely. Such levels would be the highest joblessness rates since the Great Depression of the 1930s.

“AI could wipe out half of all entry-level white-collar jobs — and spike unemployment to 10-20% in the next one to five years,” Cairo says.

From Claude to automation: Anthropic’s shifting role

Anthropic, which competes with OpenAI and Google in developing conversational AI systems, has built one of the market’s leading large language models (LLMs).

These systems process and generate human-like text responses across multiple applications.

The warning encompasses multiple sectors, with technology, finance, law and consulting facing particular vulnerability to automation.

Workers in these industries remain largely unaware of the approaching disruption, according to Dario.

“Most of them are unaware that this is about to happen,” he tells Axios. 

“It sounds crazy and people just don’t believe it.”

Furthermore, current AI applications primarily serve as augmentation tools, assisting human employees with document summarisation, contract reviews, research tasks and email composition.

Anthropic’s Claude system provides these capabilities to businesses and individual users.

Dario predicts that this augmentation model will shift towards full automation within a compressed timeframe. The transition is an inflection point that many businesses have not prepared for adequately.

“It’s going to happen in a small amount of time — as little as a couple of years or less,” he explains.

Already, hundreds of technology companies are developing agentic AI systems designed to perform human work tasks without ongoing supervision. 

Mark Zuckerberg, CEO of Meta says: “Probably in 2025, we at Meta, as well as the other companies that are basically working on this, are going to have an AI that can effectively be a sort of mid-level engineer,” as he said in January.

Microsoft and Walmart signals early job cuts

Evidence suggests AI-driven workforce reductions have already commenced across multiple industries.

Microsoft announced layoffs affecting roughly 3% of its workforce in May. Approximately 6,000 employees lost positions, with engineers representing a significant portion of those affected.

Meanwhile, Walmart eliminated 1,500 positions whilst implementing operational simplifications. The company has since introduced automation systems to reduce labour requirements within its supply chain operations.

CrowdStrike cut 500 positions whilst citing market and technological changes – and attributed the reductions to AI reshaping industry practices across sectors.

The company stated that it was at “a market and technology inflection point, with AI reshaping every industry”. 

Aneesh Raman, Chief Economic Opportunity Officer at LinkedIn, recently wrote a column for the New York Times which argued that AI is already breaking “the bottom rungs of the career ladder”, with junior software developers, paralegals and retail workers at high risk.

These developments align with broader patterns of technological displacement affecting junior roles before progressing to more senior positions.

Anthropic CEO proposes token tax solution

Despite leading a company that develops the technology driving these workforce changes, Dario advocates for measures to mitigate negative employment impacts.

His proposals centre on transparency requirements and financial redistribution mechanisms.

He met with UK Prime Minister Sir Keir Starmer in February to discuss AI’s role in Britain’s economic future – addressing regulatory frameworks and workforce transition strategies.

“We, as the producers of this technology, have a duty and an obligation to be honest about what is coming,” Dario says.

His proposed “token tax” would require AI companies to contribute 3% of revenues to government redistribution programmes. These funds would compensate workers displaced by automation technologies.

“Obviously, that’s not in my economic interest,” he says, “but I think that would be a reasonable solution to the problem.”

Trump administration adopts hands-off approach

Regulatory responses vary significantly across jurisdictions, with many governments prioritising AI development over worker protection measures.

As a result, US President Donald Trump has suggested implementing a ten-year moratorium on AI regulation to facilitate technological advancement.

Dario considers this approach insufficient for addressing automation’s workforce implications – arguing that outright prohibition of AI development lacks feasibility given global competitive pressures.

“You can’t just step in front of the train and stop it,” he says.

“The only move that’s going to work is steering the train — steer it 10 degrees in a different direction from where it was going.”

Mark Zuckerberg is personally assembling a secret superintelligence group at Meta, recruiting top AI researchers and engineers tasked with achieving AGI

Mark Zuckerberg is reportedly assembling a team of AI experts to achieve artificial general intelligence (AGI), recruiting from researchers and engineers.

As the CEO of Meta, he has prioritised recruiting for the secretive new team, referred to internally as a superintelligence group, according to Bloomberg.

He believes Meta can outstrip other technology companies in AGI – which is the concept that machines can perform as well as humans at many tasks.

Once Meta reaches that milestone, it could integrate the capability into its suite of products, including social media and communications platforms, its Meta chatbot and AI-powered Ray-Ban glasses.

Mark aims to hire around 50 people for the new team, including a new head of AI research, almost all of whom he is recruiting personally.

He has already rearranged desks at the company’s Menlo Park headquarters so the new staff will sit near him, according to people familiar with the matter.

Meta’s plans with Scale AI

Mark is building the team alongside a planned multi-billion dollar investment in Scale AI, a company that offers data services to help companies train their AI models.

Scale AI Founder Alexandr Wang is also expected to join the superintelligence group after a deal is completed. The investment is set to become Meta’s largest external investment to date.

Mark has spoken openly about making AI a priority for his company. In the past two months, he has adopted what insiders describe as “founder mode”, characterised by an increasingly hands-on management style, according to people familiar with his work.

His desire to micromanage the recruitment effort stems partly from frustration over the quality of and response to Llama 4, the latest version of Meta’s large language model (LLM) that powers chatbots and other services.

The latest release in April proved disappointing to Mark, who had repeatedly told Meta insiders he wanted the best AI offering by the end of the year.

His demands then created pressure on AI-focused staff to achieve those goals.

The model’s performance has been questioned both internally by Meta’s own leadership and externally by developers who viewed them as over-promising and under-delivering.

The impact of Meta’s delayed “Behemoth” model 

Meta later delayed plans to release its largest model yet, known as ‘Behemoth’, which it had promoted as superior to competing models from OpenAI.

However, despite those proclamations, leadership grew concerned it did not sufficiently advance on previous models, according to reports.

This has reportedly pushed Mark to become more involved and led to his interest in building the new team.

According to Bloomberg, he created a WhatsApp group chat among senior leaders called ’Recruiting Party’ to discuss potential targets for the team and has additionally compiled his own list of recruits and prefers to be the first point of contact during outreach.

Now, he hopes that with the new team, Meta will see improvements to its Llama models and better AI tools for voice and personalisation features.

It remains unclear how the Superintelligence Labs group will work alongside Meta’s existing AI teams, but some employees are expected to move to the new unit, according to people familiar with the plans.

Meta’s strengths and competition

Meta is competing against rivals like OpenAI and Alphabet’s Google to become a market leader for AI, which already underpins a significant part of the company’s advertising business.

Meta has invested heavily in AI, earmarking tens of billions of dollars in capital expenditures for projects this year and what Mark has assured would be “hundreds of billions” in years to come.

Bloomberg says that over lunches and dinners at his California homes in the past month, Mark has pitched AI researchers, infrastructure engineers and other entrepreneurs on joining Meta’s team.

He has argued that, unlike rivals who are raising large funding rounds, Meta’s advertising business is strong enough to finance the tens of billions of dollars needed to compete in the growing AI space.

He also told potential recruits that Meta has enough cash flow to fund a multi-gigawatt data centre, which would give the company one of the most powerful server bases in the world.

Confused by Apple’s naming conventions? You’re not the only one. Bloomberg reports that this year at WWDC, Apple plans to announce a broad overhaul of all of its operating systems. That includes renaming them to be more consistent. Starting this year, Apple will reportedly begin denoting each OS version for each product by year, instead of by version. Confusingly, it will start with the next year, rather than this year (just like cars). So the versions we’ll see at this year’s WWDC will not be iOS 25, but rather iOS 26, watchOS 26, and so on, in place of iOS 19 and watchOS 12.

Gear Roundup

All the top gear news of the week in one place. Here’s more you may have missed this week:

Carl Pei Thinks the Phone of the Future Will Only Have One App

Auto Shanghai 2025 Wasn’t Just a Car Show. It Was a Warning to the West

Instagram Keeps Polishing Its Edits App to Woo Video Creators

The move is reportedly part of a larger push toward a cohesive user experience across platforms. The overhaul could encompass everything from updated icons, apps, buttons, and a fresh design language, and it’s expected to be universal across all the operating systems. Apple’s fundamentally simple and irresistible user interface is a core part of the company’s DNA, so it will be interesting to see how customers react to a big redesign (hopefully better than the Apple Photos redesign). We’ll find out at WWDC, which kicks off on June 9 at 1 pm ET. —Adrienne So

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OnePlus Succumbs to AI

After a light smattering of features when it launched the OnePlus 13 in January, OnePlus is now ready to go all in on AI for its phones. Its approach is quite similar to what Nothing introduced a few months ago on the Nothing Phone (3a) series: a dedicated AI button on the side of the phone, though this one replaces the original OnePlus Alert Slider.

Dubbed the Plus Key, you can customize it to trigger specific apps or shortcuts on the phone, with an interface that looks almost exactly like Apple’s Action Button. By default, it launches AI Plus Mind, a system that will save whatever’s on the screen so you can recall it later. The idea is that you’ll press it when you see an ad for a concert while browsing, or an event invite—pressing the Plus Key will save the relevant info in the companion app, and the app will extract helpful info to create a calendar event on your behalf.

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The Plus Key and AI Plus Mind will debut first on the OnePlus 13s, a phone launching in select markets this June; it’s not coming to the US. Later this year, the AI features will roll out to the OnePlus 13 series, with other devices to follow. OnePlus says it’s actively working on more features like AI VoiceScribe, to record, summarize, and translate calls and meetings; AI Translation, to consolidate all translation capabilities into one app; and AI Reframe, to adjust the composition of your shots with generative AI.

Samsung’s Next Folding Phones are Coming

Samsung is rumored to announce its next generation of folding phones sometime this summer—the Galaxy Z Fold7 and Z Flip7—and the company officially confirmed this in a blog post announcing the rollout of the One UI 8 beta program. One UI is the name of Samsung’s Android layer, and version eight is based on the upcoming version of Android 16.

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While the beta program will be available for existing devices, Samsung says One UI 8 will “debut on Samsung’s newest foldables this summer,” making them the first to run Android 16. That’s a break from the norm, as Google historically made its Pixel devices the first to run the latest version of Android. This is likely because Google moved up the Android 16 window; instead of arriving in October, it’s coming midsummer.

Google Photos Turns 10

Google celebrated the 10th anniversary of Google Photos on May 28, and it has dished out a few new features to mark the occasion, including making a few Pixel 9-exclusive capabilities—like the Reimagine and Auto Frame AI features—more broadly available.

A redesigned editor now also shows more editing tools at a glance, and you can also select parts of the image to access specific tools instead of hunting for them in menus. For example, tap the background of an image to pull up the portrait blur tool so you can adjust the strength of the background blur effect. A new “AI Enhance” button will also merge several of Google’s AI capabilities, like Magic Eraser, with other standard editing tools for a faster edit. The new redesigned editing layout will roll out to Android devices in June, with iOS getting the update later this year.

Also new is the capability to generate a QR code to share albums with people around you (or print it out for group events). You can let folks who scan the code add their own images to the album, too.

Ricoh Has a New Pocket Camera

Ricoh has announced the GR IV pocket camera, the successor to the GR III, one of the best pocket cameras I’ve ever tested. The GR IV has a new lens with seven elements, but it remains the same focal length: 18.3mm f/2.8 (roughly 28mm in 35mm equivalent). So far, no word on whether there will be a GR IVx to replace the 40mm lens model.

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The GR IV has an updated APS-C sensor that bumps the resolution slightly from 24 megapixels to 26. The neutral density filter remains, and while the outside appears to have been redesigned, with slightly different buttons, the basic silhouette is the same. Like the GR III, there is no flash. A built-in flash would be nice (the GR II had one), but the ISO range of the GR IV is better, reaching 204,800 ISO at the top end, which should help with low-light photography. There’s also five-axis stabilization (up from the three-axis of the GR III).

Perhaps the most interesting news for fans of the GR camera series is that there will be face and eye detection autofocus tracking, which would seem to mean autofocus has been improved. If the GR III has a weakness, it’s autofocus. There will also be 53 gigabytes of built-in storage (usable), which is perfect for a camera like this, though my enthusiasm for that is tempered by the fact that the GR IV will use microSD cards rather than full-size SD.

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The GR IV is set to arrive this fall, with another model featuring a Highlight Diffusion Filter coming “after winter 2025.” Interestingly, Ricoh says production and shipment of the Ricoh GR III will stop in July 2025, due to difficulty in procuring parts and components. The 40mm GRIIIx will continue to be sold for now. —Scott Gilbertson