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This is both terrifying and fascinating at the same time. The potential in either direction is immense, imagine having a soundtrack to daily life tailored to what is happening? Would you hear boss music if you mess up at work/school/etc?
How is this viewed by the user is a good question as well. If it's broadcast on a speaker/projector that everyone else can see what the ai is showing us as well. If it's only viewable to us by either implants or some sort of smart glass technology then it's "private" to the user.
Like you mention, the potential abuse of this system is unimaginable. Ads shown directly in our vision, a paid tier that is ad free. Music is shown to be able to effect emotional state easily (movies as an example), what if the soundtrack is used to emphasize certain goals. The ai pushes you to buy a certain car brand over another because said car brand paid the ai company more.
As McLuhan said, the medium is the message. If this is a story AI is telling about you to you, then it would probably best be a purely private experience happening in headphones or around the house. If this is a story where you are woven into the world as a character in other peoples' lives, it should be happening around you. In cinematic storytelling we talk about whether something is "diegetic"; is the soundtrack coming from something in the world, or is it something only the audience can perceive as part of a constructed experience? If the goal of a "fourth wall AI" (should be in my opinion) to make your perception of yourself more fully unified with the world around you, I'd advocate for these things to be realized 'diegetically', so that multiple fourth-wall AI would have to work together to create harmony in the reality they construct for their audiences. I think on a more sociological level, I am worried about how much we each feel separate and different from one another in society. I think that having the fourth wall AI be strictly a public phenomenon would be a better choice not just from an artistic perspective, but from a sense of its potential for reinforcing our social fabric.