The worst AI I have ever seen in a video game is Elder Scrolls III: Morrowind. In this game, a player knows exactly when and where anything will be. The decisions made are nearly always the same. A player could attack a guard and be sure that people would run and any guards in the area would charge the player. However if you hop over a barrier, such as a wall or plant and shoot a guard with a bow or cast spells at him, the guard would either run forward into the wall or hack in mid air at no-one. To make it more simple, one had only to make a spell to walk in the air and sit on a house or simply attack the guard from mid-air. It was a simple thing to know that if you attacked a guard the right way and they did not see you, they would find you and hunt you down anyway.
On the other hand, the best AI I have ever seen comes from the sequel to Elder Scrolls III: Morrowind, Elder Scrolls IV: Oblivion. In this game, the guards will chase you down, kill other people, if they attack you, then loot them and continue attacking you after. They will pull out a bow and arrow to hit you if they cannot otherwise. If you are sneaky enough and hit the guard while he is not looking, he may think it was another bloke behind him. You can get guards to attack other people this way. In addition, if other citizens are around, they may help the guards, or you, depending. If you attack their leader, such as a religious leader, they may run away, or run to get more powerful weaponry, or simply attack you with whatever they can pick up and use. The citizens can be found practicing their skills and stealing other people’s stuff. Even the animals may be attacking you or another animal or guard nearby. If you hear an animal attacking, you may be surprised to find a guard in the middle of the woods is the target, instead of you, or perhaps a deer is on the menu. There is even a champion in the coliseum that the people will hate you for killing, or, if you uncover an evil secret of his, they will love you for it. However, even more so, the guards will block your attacks, people will steal YOUR stuff, and there is no way to play the EXACT same game twice. However, you can come close.
AI has a long way to go, recently Physics cards have been introduced by the same companies that make Graphics cards, and I do not believe that AI cards are far off. It is probably only a matter of years before the AI is the focus, as physics are now, and graphics were in the nineties. AI cards will likely be in either the next generation of video games (PS4 anyone?) or the one after that at the latest (2015). I see no reason not to take the power you could cram into a little card like that, especially at that point in the future, (10 GHz processors in watches?) and use it to increase the intellect of everything in a game. If games are more real, they will be more adaptively involving. More adaptive means they will become obsolete slower, allowing more production time in between games, allowing higher price points, and better products and profits. A likely win/win situation for all involved.