TL;DR
2026 marks a profound shift from the early experimental phase of AI avatars to their widespread adoption and integration into daily life. While the developments of 2010 laid the groundwork, the present era demonstrates how rapidly these technologies have evolved and embedded themselves across digital and social environments. To illustrate this shift, consider that the number of active AI avatars in use has grown exponentially, from just a few thousand in 2010 to over 10 million in 2026. This dramatic increase not only underscores the pace of technological advancement but also highlights the increasingly central role AI avatars play in shaping contemporary human experience.
Introduction
In 2010, algorithm-driven avatars operated with limited autonomy. According to Wikipedia, Genies introduced advanced avatar creation tools for celebrities and talent agencies in 2025. By 2026, avatars have evolved into genuine collaborators.
AI avatars have become essential collaborators, fundamentally changing the relationship between humans and digital agents. This shift is more than a technological upgrade; it redefines how we integrate digital counterparts into society. With capabilities doubling every 18 months, AI avatars now perceive, understand, and interact with users more effectively. As active partners, they are transforming how we live, work, and create, reflecting the unprecedented pace and scope of change in this era.
AI was once mainly for gamers and tech fans, but now anyone with internet and a smartphone can use it. According to IoT Analytics, the number of connected IoT devices worldwide is expected to reach about 40 billion by 2030, up from around 16.6 billion in 2023. Combined with nearly 4 billion 5G smartphones equipped with AI capabilities and a data-centre infrastructure in which roughly 70 per cent of capacity is optimised for AI workloads, it is reasonable to say that by 2030, AI will be embedded in the vast majority of connected devices. This means that nearly everyone worldwide has access to AI in their pockets through their smartphones. These tools are everywhere, changing our world faster than ever. For instance, a farmer in Kenya uses AI-driven weather alerts to better plan crop irrigation, highlighting the global reach of this technology.
Adapting to the age of AI can feel overwhelming. However, engaging with AI now significantly increases your ability to achieve personal, creative, and business objectives.
Delaying engagement with AI may result in missed opportunities or falling behind.
2010: The Beginning
Sixteen years ago, I took the stage at IBM’s R&D by the University of Haifa to introduce PIVOE AI avatars for training in Second Life. The next day, following the “Synthetic Reality: The Science and Applications of Virtual, Mixed, and Augmented Reality” IBM Symposium, I found myself driving up Sha’ar Hagai on the way to “The Laboratory” a National TV show in Jerusalem. The platform I presented, PIVOTE Avatar, was among the first to let people use and manage AI avatars, also called bots, on both computers and mobile devices. Developed by Daden Limited in the UK, it aimed to put trainees in tough situations, create different scenarios, and help them get better at making decisions under stress.
The metaverse was in its infancy at the time. Building such avatars was costly and complex, with development taking weeks and costing thousands of dollars.
It looked futuristic. It sounded like science fiction. But in those days, it was the best we could develop.
According to Biz4Group and Computer Graphics World, developing an AI avatar in 2010 typically cost between $10,000 and $30,000 and took weeks of complex work. Teams and Skype meetings became routine, employees on global projects spent nearly 17 hours a week in meetings, yet most people still thought this was strange, even confusing. Back then, these avatars acted like puppets, following a fixed list of actions and reactions. They used simple rules like ‘if-then branching,’ so their responses were limited to what programmers set up.
To illustrate this shift more vividly, consider the changes in coding over time. In 2010, a sample code might have looked like this:
‘if (user_input == “greet”) {
print(”Hello, user!”);
}’
This straightforward snippet shows how avatars were locked into static, pre-programmed responses. Fast forward to 2026, coding snippets for AI avatars have transformed dramatically, embracing machine learning capabilities:
‘model.train(data)
prediction = model.predict(user_input)
response = NLP.process(prediction)’
This exemplifies not only the evolution of code complexity but also the integration of AI’s learning capabilities, allowing avatars to interpret a far wider range of human inputs and provide nuanced responses at a fraction of the cost and time.
I led a training workshop for senior executives using avatars in a 3D virtual world. The concept was so new that it often met with scepticism; executives even asked, “Is this really going to be profitable?” Senior CEOs told me, “It’s like Science Fiction for us.” A friend said more than once, “I don’t really understand what you’re doing.” Their doubts were clear, since virtual avatars were so new and untested, and their value was unproven. This only made me more determined to demonstrate the technology’s value.
And BOOM! 16 years just gone by.
1# AI Avatars 2026
Fast forward to 2026: AI avatars and agents are now everywhere. Evolved dramatically, they can detect emotional cues, suggest actions in real time, and generate personalised content. A customer service AI, for example, can sense frustration in a client’s voice and adjust its responses for empathy and reassurance. Yet, interpreting human emotion remains challenging, and missteps can lead to awkward or ineffective interactions, raising new social and ethical questions.
Now, every influencer or brand, even in adult entertainment, can have an AI persona, showing just how far the technology has come. Genies now partners with Unity to offer customizable AI avatars in the Unity Asset Store. According to Amplework, developing an AI agent today can cost between $10,000 and $100,000, but the technology is more accessible than ever. My son and I built an AI agent model for less than 100 NIS.
Time: 1 hour of vibe coding in our living room.
What once took weeks and a fortune now takes an hour and pocket change. In 2010, developing an AI avatar typically cost between $10,000 and $30,000. Today, the cost has plummeted to just $25. This stark contrast highlights the democratisation of AI technology, making powerful tools accessible to almost everyone.
When considered together, these two moments, spanning sixteen years, highlight the extraordinary scale and impact of technological transformation. It’s as if we’ve watched a time-lapse film of technology’s rapid evolution, revealing massive shifts that, even when experienced firsthand, can be difficult to fully comprehend. This vivid imagery encapsulates how deeply these changes have reshaped every part of life.
The best way to understand this shift is to reflect on your own memories.
When did you first meet AI? Was it in a game, on your phone, or with a digital assistant?
Think back to your first encounter with AI. Was it during a game, on a smartphone, or through a digital assistant? Maybe it subtly changed your perspective. This isn’t just about reminiscing; it’s an opportunity to make the digital revolution personal and envision how your digital companion might shape your future.
Next stop: 2# Phone
In 2010, smartphones like the iPhone 4—with 16 GB of storage, a 5-megapixel camera, and Angry Birds—were cutting-edge but still just tools. By 2026, phones will be AI-powered partners that know our routines, anticipate our needs, and connect deeply with our daily lives.
3# TV
In 2010, TV meant scheduled events—if you missed “Breaking Bad,” “How I Met Your Mother,” “American Idol,” or, in Israel, “Eretz Nehederet” and “Big Brother,” you missed out. By 2026, AI will deliver personalised on-demand shows with unprecedented precision, exemplified by one revolutionary show that changes the landscape: “Future Visions,” created entirely by AI. This series adapts to viewers’ preferences in real time, offering a unique experience for each user. TV is now individualised, with Netflix AI and even friends or family generating new series using AI Studio tools like Runway, Kling, and Google’s Veo.
4# Hollywood
In 2010, going to the movies meant long lines at Cinema City, a ticket to “Avatar,” popcorn, and the magic of Spielberg or Cameron on the big screen. By 2026, AR glasses and AI will let anyone enjoy, remix, or even create films at home—James Cameron’s “Avatar 3” will share the stage with new indie creators and algorithm-driven stories.
#6 Economy
In 2010, ExxonMobil and other oil giants topped the Forbes list—wealth meant physical resources and deep wells. In 2026, companies like NVIDIA, Google, Apple, Microsoft, and OpenAI are the new economic powerhouses, with value driven by data, algorithms, and cloud infrastructure. The rise of tech and AI has changed how we work, what skills matter, and even how countries compete. To keep up, we all need to adapt, learn to work with AI, and update our skills for a rapidly shifting world.
#7 Video Games, Mobile & Toys
In 2010, video games like Call of Duty: Modern Warfare 2, World of Warcraft, The Sims 3, and StarCraft II were static: Buy a CD, insert it into your gaming PC or console, and play. By 2026, streaming AI-powered games will be available on your console, PC, or mobile device. AI tools create evolving, real-time challenges and virtual worlds that remember your choices. You can advance levels with your avatar on any platform.
Mobile games in 2010, like Angry Birds and Doodle Jump, were simple distractions. Now, mobile games adapt to our habits, connect us with friends, and build skills for a changing world. On the downside, predatory monetisation tactics are the new normal. AI-based Gamblification (Games+Gambling) drives more risky, addictive behaviours. This shift raises important questions: Should there be regulations to curb such monetisation methods? What ethical responsibilities do developers have to protect users from addictive patterns? Addressing these societal stakes invites a crucial conversation about balancing innovation with consumer welfare.
Toys in 2010 were digital novelties: Webkinz and Club Penguin offered simple rules and limited interactions. By 2026, AI toys feel alive: they know your name, remember your history, and invent new activities, making every play session unique.
Understanding the Broader Impact of AI Avatars
This section brings together the main idea: AI avatars and related tech have gone from isolated inventions to changing daily life. By looking at how AI first appeared in entertainment, especially video games, and then spread to other areas, I show that using AI has helped us get ready for constant change. This journey with AI in entertainment prepares us for a tech-driven future and highlights the need for Gameful Intelligence, a new way of thinking that helps people handle complex, fast-changing systems.
Most of us first met AI in video games, not at work or school. From PAC-MAN to Fortnite, we learned to handle changing systems, pick things up as we played, make quick choices, and adapt to new rules, essentially preparing us for our future engagement with AI-driven environments.
What many people thought was just entertainment, or even a waste of time, has actually been a training ground. It’s where we learned to understand complex systems, handle stress, and keep going without all the answers. It’s no surprise that video games are now leading the way in the AI era.
The important question here is not what technology can do, but what intelligence we need to realize our potential and lead. That’s why I coined Gameful Intelligence™. It means being able to learn, adapt, and come up with new ideas by being playful, trying things out, and solving problems in changing situations. This new intelligence is characterized by four main abilities: the ability to perceive patterns in complex systems, the flexibility to adjust plans in response to new information, the creativity to devise innovative solutions in the face of uncertainty, and the willingness to take action through small, strategic steps.
Here’s an example: an urban planner, a game developer, a teacher, and a community leader work together to solve city traffic problems. They use Gameful Intelligence by spotting patterns in traffic, testing small changes, adjusting plans based on feedback, and coming up with creative ideas such as encouraging biking. By combining their skills and playful thinking, they make the city better. This shows that Gameful Intelligence isn’t just a set of skills, it’s a new way of thinking that helps people handle constant change. It gives us a framework for learning, adapting, and being creative in today’s world.
It is not just about technical knowledge or skills anymore, but about having an approach that fits a world that is always changing.
Vibe Coding
Gameful Intelligence is a way to reach your potential in the age of AI. It’s made up of four main abilities that anyone can develop. But what does this look like in real life? For example, I’m sitting in the living room with my son, and we’re building an AI agent called Dr GIAi together.
We went for Vibe Coding. We’re working on building creativity and creative skills with AI. We try different approaches and prompts to get better results. We change how we phrase things, test different AI systems and tools, and keep improving our methods.
Gameful Intelligence’s Mega-Distruptive Crafting capabilities - Check!
Our goal is to become expert creators who make unique, high-quality products. The agent, based on my book about game intelligence, will be able to talk with you, figure out your level of game intelligence, and give you a score for each of the four main abilities. It will also offer personalized tips and advice based on your interests to help you reach your goals.
For example, imagine a brief interaction: ‘User: How can I improve my mega disruptive JuLoot capabilities?’ Dr.GIAi: ‘Based on your current level, try engaging in a non-formal meeting, in a “hacker mindset” that challenges your disruptive skills. Here’s a recommendation you might find beneficial.’ This dialogue snippet illustrates the real-time feedback loop in action. Early testers have shared their experiences, with one user exclaiming, ‘Whoa, it nailed my blind spot!’
This kind of human reaction underscores the prototype’s practical value and promise.
Coda
When I watch my son try new things, ask questions, and not worry about making mistakes, I think back to when I was developing avatars in 2010. Technology has changed a lot since then, but curiosity and creative freedom are still key to personal growth. These traits are at the heart of this essay: Gameful Intelligence™ is essential for thriving in the age of AI. The skills I learned from early avatar work still help us adapt and succeed as technology continues to change.
I feel hopeful that the future will be better. By cultivating Gameful Intelligence™, we can become our best selves.
It has been quite a journey, from the ‘alien’ avatars of 2010
to the AI agents of 2026,
And in the future, we will continue to shape it together.
I was there at first.
And now, we are all writing the next chapter together.
Everything is open now.
“Roll up your sleeves so as not to be left behind.” Andrei Karpati1.
Elhanan Gazit
January, 2026
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Andrei Karpati who coined the term ‘Vibe Coding, is a former director of AI and autopilot at Tesla, a former senior researcher at OpenAI.
