I have been anticipating game developers starting using Large Language Model AI to bring NPCs to life. I wouldn't be surprise if many are already considering it. It would be interesting if Maxis continued using Simlish, but used thought bubbles in human language, or some kind of text box, that serves as a translation for the player. That way they could avoid synthetic AI voice actors or repetitive real language actor voice files.
It would be fascinating to just sit back and observe them interact.
Life By You could also do that. Rod Humble said they enjoyed watching their sim-people interact, but I don't know if any ChatGPT type AI is behind their conversation system, but maybe they can probably expand on that down the line.