Finite State Machines (FSM) can be considered one of the simplest AI models, and they are commonly used in games. A state machine basically consists of a set number of states that are connected in a graph by the transitions between them. A game entity starts with an initial state and then looks out for the events and rules that will trigger a transition to another state. A game entity can only be in exactly one state at any given time.
For example, let's take a look at an AI guard character in a typical shooting game. Its states could be as simple as patrolling, chasing, and shooting:
There are basically four components ...