The developers at Neon have created an online AI SQL playground for Postgres where users can connect to a Neon Postgres database and use natural language to generate SQL queries with the help of OpenAI's gpt-3.5-turbo model. The playground is live and available for testing, allowing users to explore their database schema, ask questions about it, and even get AI-assisted modifications. To establish a connection, users paste their database connection string and can use the "Ask AI" button or a shortcut to submit prompts. The playground uses the Neon serverless driver to connect directly to Postgres from the browser, and is open-source with plans for an HTTP-based driver in development. The AI model generates SQL queries by processing user prompts and database schema, providing a better user experience through streaming responses. The project showcases the potential of combining AI and SQL query generation, offering a unique tool for developers to experiment and learn.