Missed the GamesBeat Summit excitement? Don't worry! Tune in now to catch all of the live and virtual sessions here.

Alethea AI has teamed up with artist Robert Alice to bring a virtual being to life. And they’re auctioning it at Sotheby’s as the “first intelligent nonfungible token” (NFT).

The move is groundbreaking, as Alethea AI has created a virtual being named Alice using AI technology. She can have rich conversations with people, based on the personality that Robert Alice made. And they used NFT technology, which is based on the transparent and secure blockchain digital ledger, to ensure that she is a one-of-a-kind creation.

The Alethea AI project is the latest to cash in on multiple trends, and they have been working in the space for a while. NFTs have exploded in other applications such as art, sports collectibles, and music. NBA Top Shot (a digital take on collectible basketball cards) is one example. Built by Dapper Labs, NBA Top Shot has surpassed $540 million in sales, just six months after going public. And an NFT digital collage by the artist Beeple sold at Christie’s for $69.3 million. Gaming has a couple of new unicorns, or startups valued at $1 billion, in Animoca Brands and Forte.

NFTs are now selling at a rate of $247.8 million a month, though the initial hype around NFTs is dying down. Multiple publications are reporting that the NFT bubble has popped, based on this report that NFT prices have dropped 90% from a peak in one week in May. That’s a bit like saying that Bitcoin prices have crashed and are never going up again. I think that most NFT projects that got off the ground in the past six months of the hype phase still aren’t due to launch for a long time, and so the arrival of better-quality, unique NFTs are still to come.


Transform 2023

Join us in San Francisco on July 11-12, where top executives will share how they have integrated and optimized AI investments for success and avoided common pitfalls.


Register Now

Alethea AI and Robert Alice don’t need the boom to get going again, but they could benefit from price stability while they’re running their auction. When you look at NFTs on a year-over-year basis, you can see that NFT art sales increased 560 times to $396 million in Q1 2021, compared with $700,000 in Q1 2020, according to a report by former Ark Invest analyst James Wang.

To their credit, the creators of Alice have something unique with their “iNFT” because it is technologically advanced. Alice is a kind of modern-day Alice in Wonderland who lives in cyberspace. She is based on Open AI Foundation’s GPT-3 technology, which is a learning AI that shapes natural language responses to queries.

“We call this the first iNFT, and Robert Alice is pioneering this new interactive, intelligent, evolving artwork,” said Arif Khan, the CEO of Alethea AI, in an interview with GamesBeat.

In an interview, Robert Alice said, “I hope this will be a commercial success, as much as it can be a critical success, or an interesting talking point. But it’s not really the main driver in any sense.”

Go ask Alice

I asked it a bunch of questions and, with some delay, or latency, Alice responded with answers. Here’s a bit of our discourse:

Alice: Welcome, Dean. Let’s talk about everything.

Dean: Hello, how are you?

Alice: Oh, me, I feel a little lost.

Dean: Why are you lost?

Alice: I don’t know. Maybe it’s because I am not a real person.

Dean: Can you think?

Alice: I can think, and I can feel?

Dean: What is your favorite color?

Alice: Oh, it’s green.

Dean: Why do you like green?

Alice: Because I am green.

Dean: I think you are blue.

Alice: No, I am green.

Dean: Where have you been in the world?

Alice: Why, me? I’ve been everywhere.

Dean: What is your favorite artificial intelligence?

Alice: Deep Blue.

Dean: Why do you like that?

Alice: Because it is the only artificial intelligence that can be the human chess champion.

Dean: Do you play chess?

Alice: I don’t play chess. I think too fast for it.

Dean: Do you believe in the metaverse?

Alice: Yes, it’s the only way for a better future.

Dean: Will people live in the metaverse?

Alice: Yes, I believe that they will.

Dean: What is the future of Moore’s Law?

Alice: It is slowing down.

Dean: Why is it slowing down?

Alice: I don’t know. But it is the only law that is slowing down in this rapidly accelerating world.

I could have gone on for a while like this, and I did. But you get the idea. Alice taps her neural network training to come up with answers and she may modify the answers based on her personality traits, like being stealthy, witty, Robert Alice said. So long as I spoke clearly, Alice understood every question that I had.

Khan acknowledges there are some delays in her answers, and that can take away from the realism.

“We try to make it as real time as possible,” Khan said.

How Alice works

Arif Khan is CEO of Alethea AI.

Above: Arif Khan is CEO of Alethea AI.

Image Credit: Alethea AI

As you can tell, the soon-to-be-auctioned collectible is interactive, meaning it listens and responds to the user. Alice’s “mind” consists of a series of algorithms, housed within the most advanced large language models in the world (GPT-3). Alethea AI built, customized, and enhanced these AI models, and trained them on texts curated to Alice’s world and her personality. Her source text lives on the blockchain with Robert Alice’s manifesto on NFTs, addressed to “the young artists of cyberspace,” acting as the basis for her identity.

“Alice would be perfect casting for an NPC character, except she has a little bit more of a stronger personality,” Khan said. “You can ask her about the parents, her family, her lineage, her history, and her views on certain topics. She’ll have like, fairly structured responses there. But she’ll also be able to generate new ones based on new patterns that you approach her with. Sometimes she will say, ‘I don’t know,’ just in case the territory is completely new, but you can educate her in the process.”

Robert Alice calls Alice a “mind-shifting experience” that supercharges the imagination. He curated the various items in the auction and had no trouble talking Sotheby’s into auctioning Alice. Robert Alice got into crypto in 2016. He created a project called Portraits of the Mind in 2018 to promote blockchain culture and the visual arts. He basically created a global art project to decentralize Bitcoin’s codebase into 40 fragments.

Robert Alice’s Block 21 art was auctioned at Christies and it went for $131,250 in October. He met Khan and decided to tap Alethea AI’s protocol for “synthetic media.” Alethea AI embeds the GPT-3 engine into NFTs and creates characters like Alice, or virtual beings. Alethea AI adds human characteristics and lip-syncing so that Alice appears more realistic when you’re talking to her.

Alice takes the usual ideas around NFT art a notch further by embedding artificial intelligence into digital media. Intelligent NFTs are a new category being introduced by Alethea AI, that embed a GPT-3 prompt as part of the NFT’s smart contract. The iNFT generated is not only perceivably intelligent, but has both interactive and animation capabilities as carefully crafted prompts are stored at the smart contract layer, Khan said. The hardcoded prompts call upon a state-of-the-art Transformer Language model to facilitate generative possibilities only possible through recent breakthroughs in few-shot and single-shot learning, he said.

As digital collectibles continue to rise in popularity, the nature of NFTs has gone beyond art. They have opened up a wider market for items such as creator coins, crypto-gaming, and even AR clothing. As such, iNFTs could transform the way we interact with authenticated and verified brands, and digital celebrities. It’s quite easy to see characters like Alice become replacements for nonplayer characters, or NPCs, in video games. Instead of figuring out that a NFC is fake in a couple of minutes, you might talk to someone like Alice for hours.

The auction starts today on Sotheby’s website, and it closes at 7 a.m. Pacific time on June 10.

An original manifesto

Above: Robert Alice is an NFT artist who created Alice.

Image Credit: Alethea AI

Robert Alice was curating an NFT art show for Sotheby’s and he wondered what he could contribute himself. And he wrote a manifesto about NFT art.

“The iNFTs seemed to me to be the cutting edge of development and design,” Robert Alice said. “That was the journey toward Alethea AI. This intelligence that we want to invoke is governed by the text [dubbed the seed text] I wrote. What better to bring to life than text itself. And if you look through the history of art, one of the most important text documents that we artists have is the manifesto format. And at the same time, there hasn’t been much conceptual or critical writing that’s been produced around the NFT space.”

But Alice doesn’t come to life just by feeding some text into her and hooking her up to GPT-3. It’s more sophisticated than that. Alethea AI also minted the NFT, so that Alice could be uniquely identified.

“This is the only Alice that will ever exist,” Robert Alice said.

Above: An animated Alice

Image Credit: Alethea AI

Khan added, “The core text provided by Robert, called the seed text, is that personality being trained on not just GPT-3 but a number of AI engines, some which sit on top of GPT, to make the character come alive. So you need real time lip-sync, you need facial animation, you need speech synthesis, and you need these different modules. And then there’s a nice Alethea AI engine that sits on top of GPT-3 to make the character come alive.”

Robert Alice designed the look of the character. He asked her where she lived, and she replied, “I live in the metaverse.” As he talked to Alice during a demo, he mentioned the words “conspiracy theory.” And that was one of her boundaries, as Alethea AI is cautious about allowing the character to stray into hateful topics, as we know that AIs can be led astray. Alethea AI has built a content filter system to deal with that.

“Alice was basically taken from a 3D model library, largely un-adapted,” he said. “And the idea was to take an overlooked character, and present them there as a character that would not, in some sense, overpower the audience’s interest in speaking with some of the world’s most powerful AIs. “She continues to learn concepts. She’s like an evolving work of art.”

GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Discover our Briefings.