Seen a very primitive html game that used ai chat ( cant remembers the name) but very much looking forward to this being implemented into games. Even more, voice activated ai that would change the outcome of conversations within single player games. Imagine playing fallout and telling the first vault chick you see that you wanna bend her over. Content on the next level...lol
Any sort of AI chatbot I have spoken with forgets what they're doing after 2 messages and is garbage at drawing context from a situation. I think there is a long way to go before they're any good.
It would definitely have to be self-contained which would either balloon the project size, be wildly limited, or be both at the same time. I'd love an AI character but like someone said above, it forgets too quickly and likely wouldn't give the results you wanted. I'm sure it would be better used to generate text / world building / general text for a game rather than being an interactive element that had any level of quality in it.