Artificial Intelligence in online game using Google App Engine
Bear in mind that you can also break up your updates into multiple requests (internally): do a bit of work, redirect to the same handler but different state; do more work; etc.  (I'm failing somehow to comment on Peter Recore's answer, which is where this really belongs.)
I see that the free service only allows 100k task queue calls/day, so 1 task/NPC would probably use up your resources way too fast.  Cron job to do some work/create task queues to update NPCs in appropriately-sized groups?  
Anyway, just some thoughts; good luck.
I am currently in the planning stages of a game for google app engine, but cannot wrap my head around how I am going to handle AI.  I intend to have persistant NPCs that will move about the map, but short of writing a program that generates the same XML requests I use to control player actions, than run it on another server I am stuck on how to do it.  I have looked at the Task Queue feature, but due to long running processes not being an option on the App engine, I am a little stuck. 
I intend to run multiple server instances with 200+ persistant NPC entities that I will need to update.  Most action is slowly roaming around based on player movements/concentrations, and attacking close range players...(you can probably guess the type of game im developing)