Unreal that feels real: artificial intelligence-enhanced augmented reality for treating social and occupational dysfunction in post-traumatic stress disorder and anxiety disorders

<b>Background:</b> Fear- and trauma-related conditions, such as post-traumatic stress disorder (PTSD) and social phobia, often manifest as socially avoidant behaviours, which commonly contribute to social and occupational disability transdiagnostically. While gold-standard treatments (i.e. exposure therapy, psychotropic medications) are effective, they are hindered by high dropout rates and limited impact on real-world functioning. Furthermore, most existing interventions only target symptom reduction, with few addressing avoidance-related deficits in social and occupational functioning.<b>Objectives:</b> This methods paper introduces an innovative augmented reality exposure therapy (ARET) technology designed to address the limitations of traditional interventions for anxiety disorders and PTSD, by directly targeting social and occupational dysfunction through exposure to real-life social contexts.<b>Method:</b> We introduce an ARET system, using artificial intelligence (AI)-driven, augmented reality (AR) technology, that enables exposure to realistic scenarios within the patient's real-world environment, fostering contextual generalization and functional improvement. Featuring holographic three-dimensional humans, precise surface mapping, wireless mobility, and telemedicine capabilities, the software provides customizable exposure scenarios to transform an environment into various spaces (e.g. grocery store, house party) with diverse human characters, as well as flexible AI-driven human interactions tailored to individual needs.<b>Results:</b> We share observations and feedback from the treatment of first responders with PTSD. Patients found the technology easy to use, with immersive realism, active engagement, and strong emotional responses needed for effective exposure therapy. Advances in AI-driven character development and AR hardware accessibility support the wider adoption of ARET by clinicians.<b>Conclusion:</b> By bridging the gap between clinical interventions and real-world functioning, ARET offers a transformative approach to addressing the pervasive impact of psychiatric disorders on social and occupational outcomes.