So, what about using a Commodore 64 to do it? There’s no “trick” here—it’s just that the workload is much, much smaller than you likely imagine. The author, Nick A. Bild, describes his process in creating the program on his Github page for the project. In essence, he created a Principal Component Analysis (PCA) algorithm that can run on the Commodore 64’s 8-bit CPU and 64K of RAM by radically simplifying a much more complex AI model.
The Commodore 64 program can only generate single-color 8×8 sprite characters, but it really is generating them. The dataset was “about 100 retro-inspired sprites”, and the generation process takes around 20 minutes to run on a real C64. The final image produced is shown on screen when it’s finished. Bild shares a few sprites generated by the program, which we’ll reproduce here: