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Quick Definition

AI stands for Artificial Intelligence. In fictional works, an AI is a computer program that is able to act as if it is human, usually with some sort of avatar. It may also display some quirks, such as an unusual way of speaking.

Actual AI is pretty far from this, as it simply refers to software that makes decisions based on input. An example of a real world AI would be a program that prints a message asking you to guess what it's thinking about, and then answers "yes" to anything ending a vowel or "no" to anything ending in a consonant.

In video games, enemies are controlled by an AI of some type. The more complex their AI, the more realistic their behavior will appear to be. In many cases there is a general AI for a type of character and it's reused by many different enemies throughout the game.