Artificial Intelligence that looks, thinks and reacts like humans is being developed right on Auckland's doorstep and may become a commercial venture.

The University of Auckland officially launched its AI company Soul Machines after attracting US$7.5 million in funding - the university's biggest Series A funding round to date.

Soul Machines will work on technology development within the AI sector. The company says its lifelike and emotionally responsive avatars may be able to be the interfaces between humans and machines.

The AI project will be based on AI technology created by Dr Mark Sagar (now CEO of Soul Machines) and team at the Auckland Bioengineering Institute (ABI) at the University of Auckland.

Sagar has won two Academy Awards for his work on the Avatar film, and also heads the Bioengineering Institute's Lab for Animate Technologies.

Tech entrepreneur Greg Cross has also joined Soul Machines to help launch and gain commercialisation.

“Our engineering team will focus on bringing human life to technology that is intelligent, emotive and adaptive. Our goal is to define the user experience for Artificial Intelligence systems and platforms,” Sagar explains.

“We at UniServices believe that Soul Machines also demonstrates the unique power that comes from the combination of world-class research at the University of Auckland and the commercialisation expertise that we have built over almost 30 years," adds Andy Shenk, Auckland UniServices CEO.

Soul Machines was funded through Hong Kong-based venture capital firm Horizons Ventures. The firm has also been involved in early investment rounds such as Siri and Deep Mind. Phil Chen from Horizons Ventures will join the Soul Machines board.