The servers should be available to large publishers as well as indies for free. So this shouldn’t be problem. You are right that xbox it self doesn’t use cloud computing any different than the pc or ps4, but Xbox was designed for using cloud. Cloud computing was one of the reason, why xbox required a 24-hours internet connection. Forza(drivatar, physics), Titanfall(physics in multiplayer) already use cloud and more and more developers consider using/are using a cloud computing e.g Babelflux(Navpower) for AI system or Slightly Mad Studios(Project CARS) etc.
After the presentation on GameAiConf about AI system in KCD I think that they could use it for calculation of non-visible characters, because some characters can’t be just deactivated like in most of the games when they are not on the screen, because they have to work, go to the pub, buy new stuffs, sleep…