In this article, Gwern proposes replacing AI Dungeon's free-text parser with a menu of CYOA options. I don't think it will work, at least not with the current generation GPT-3. GPT-3 won't be able to generate a good CYOA until it can generate a good non-interactive novel. Today, GPT-3 can generate text, so you could try to use it to generate a whole novel. People have, but the novels it generates aren't worth reading…
Novels are definitely out of reach for these language models. GPT-3 currently has a limit of 2048 tokens. This is short-story territory but definitely not "book" length. I agree in this regard.
> GPT-3 won't be able to generate a good CYOA until it can generate a good non-interactive [story].
I disagree here, however. One of the best things about AI-generated text is that it can generate a multitude of options for story progression. Sure, not all progressions will be good, but the most important thing in CYOA is the _choice_. As long as there are some good options, users can choose which progressions they like best, even if the other options suck.
For example, with this toy example [1], not all the options for the progression of the story are great. But if you pick and choose which progressions you like best, you can arrive at a pretty good ending, such as [2]. -- Albeit this is entirely subjective to what each individual finds entertaining
[1] https://toldby.ai/arK_3OpvpkG
[2] https://toldby.ai/aQAXlq3LNku/end
(the site in the links above is GPT-3 generated CYOA)