Games with AI generated quests already exist.

The tricky part is integrating AI generated dialog with human designed quests. When the player asks "Where can I find wild boar to collect seven boar asses?" it's not enough to have an AI that gives a sensible answer to the question. You need an AI that can accurately convey information about the quest to kill seven boars.

And you need to train that AI without having to write 50 different versions of the same quest dialog to train the AI on. As someone that works on "AI" ^((I still think that is a stupid marketing term btw)), my first instinct is that that should be possible, but is far from trivial problem.