Here's a question: how can an AI tell whether you liked the game it made? You can't just measure engagement: you'll end up with something addictive, but not necessarily something you'd enjoy playing long-term. Asking the person directly might work, but it's easy for people to lie if there's anything actually at stake (e.g., the tactical way some Steam users give low ratings to "punish" developers).

Here's another question: what distinguishes an AI optimizing engagement from a corporation optimizing engagement? Doesn't Facebook already embody an engagement-optimizing process?

Well AI in the hands of Facebook might just make their optimization process that much more powerful. Maybe the AI will see patterns that humans are too biased to see?

That's one theorized explanation for the Fermi paradox, that highly advanced civilizations upload into their Matrix where they live a life of bliss.

I wondered many times if an AI could invent something more viral than "cats", something maybe so viral that it causes your mind to melt (ie, you go insane by the cuteness or whatever)

Well, there are any number of real-life historical cases of mass hysteria (in the literal sense), though we still don't reliably know what caused or causes the most absurd examples.

https://en.wikipedia.org/wiki/Dancing_Plague_of_1518

Christopher Cherniak, The Riddle of the Universe and Its Solution (1978), http://themindi.blogspot.in/2007/02/chapter-17-riddle-of-uni...

Infinite Jest deals with this. Though I feel like it's a spoiler to say any more than that.