I just spent an hour or so playing around with the paid version of AI Dungeon, and was super unimpressed. It's pretty fun for a moment, sure, and I assume some really heroic work went into building it. I'm not saying the creators did a poor job so much as the task is really hard and the final result is...lacking.

The "Dragon" (GPT-3) engine responds reasonably to any particular input, but clearly lacks a coherent state of the world. Objects appear and disappear; plot cues are given and then can never be summoned again if not immediately grabbed, environments change dramatically without explanation, etc.

Do you feel otherwise?

Right. It has some type of language ability, but no world modeling. So overall it really doesn't make sense.

But since that is so obvious, I assume many people are trying to figure out how to improve it. So I am excited to see if they can make progress in the next few years.

It is going to be quite difficult though. I think it might require integrating a totally different type of subsystem, if it is possible at all.

But the ability to make realistic sounding language is a step forward it seems to me.