You should refine your thoughts more instead of dumping a stream of consciousness on people.

Essentially what this stream of consciousness boils down to is "Wouldn't it be neat if AI generated all the content in the game you are playing on the fly?" Would it be neat? I guess so but I find that incredibly unappealing very similar to how AI art, stories and now video is unappealing. There's no creativity involved. There's no meaning to any of it. Sentient AI could probably have creativity but what people like you who get overly excited about this stuff don't seem to understand is how fundamentally limited our AI actually is currently. LLMs are basically one of the most advanced AI things rn and yet all it does is predict text. It has no knowledge, no capacity for learning. It's very advanced auto correct.

We've seen this kind of hype with Crypto with NFTs and with Metaverse bullshit. You should take a step back and understand what we currently have and how incredibly far away what has you excited actually is.