hot take is that I think they can… if applied well. I think about some of the shopkeepers in Skyrim or the Witcher, the background NPCs that only have 1 line. Those are characters that AI could really enhance.
However, I do not think that it means executives can start firing actors right and left. The shopkeeper in Oxenfurt would be great with AI to help, ask it things like “What’s going on in town?”. Yennifer or Dandelion would not.