1) They'd probably implement a more dumbed down version of the AI in the game in case of having no internet access.
2) I would think it would be implemented in realtime due to the fact that "extra processing power" is required to compute the AI's next move or steering in this case but it all depends on "how much extra processing power is required". If the computational requirements are fairly sparse or not significant I don't see why microsoft should offload some computations and will instead just go about updating the game to have improved drivatars.







