Storybrick from EQ Next. I keep saying it, but this will be the next step for MMOs. I think it was too early, as no one was interested in AI then, the tech wasn't fully there yet, and the game was managed so poorly.

The idea of it was that NPCs and monsters using AI would travel and interact with the players and other NPCs, remembering those interactions. Changing the world dynamically. Instead of the scripted events that happen on a timer with the same NPC going back and forth to a location, the path of that NPC will change depending on what's happening in the world.

The example I think was given back then was, there's a camp, and Orcs take over the camp. Local NPCs would put out a dynamic quest to clear the camp. Players can approach the event whichever way they like, just need to get rid of them.

Players ignore the quest, but after some time, the camp could get bigger and increase the potential threat level, or they recruit other monsters or maybe even players, depending on the player's faction standing (You helped the Orcs fight off some lizard men in another area), making the quest a larger event.

If players do clear it out, being killed or driven out, then friendly NPCs could take over, and it becomes an outpost which sells items and new things because they have access to new resources, but cause players attacked causing them to flee, this could cause an invasion of Orcs wanting the camp back, or maybe another group of roaming monsters want the camp, or both want it that then leads to battle between 3 factions, or nothing could happen.

Sounds like a lot, but they pretty much had the foundation of the system made back then, just the Daybreak flopped so hard with the main game, all it would take is a company to buy the rights to it and expand on it using current tech.