alt Hacker NewsAGI is here and its first task is obviously completing the C64’s game library.
Not really. AGI is a game interpreter, like LucasArts’ SCUMM or Infocom’s z machine. Games are shipped as portable code and a machine specific AGI interpreter runs them. Looks like they’re preprocessing the graphics first, though. https://en.wikipedia.org/wiki/Adventure_Game_Interpreter
Sierra released most of their AGI games on the Apple IIc/IIe. Given C64 is a roughly equivalently specced machine, there is no reason in principle why they couldn't have ported AGI to C64 as well – it just, for whatever reason, never happened. (One AGI game, "Donald Duck's Playground", was originally developed as a native C64 game, then AGI was used to port it to other platforms.)
Also, given different AGI platforms had different graphics capabilities, I expect even the original Sierra AGI games had somewhat different graphics assets on different platforms – so whatever preprocessing of graphics they are doing to make them C64-friendly, Sierra quite possibly would have done something like that anyway had they made a C64 port back in the day.