In a virtual place, fully network driven, with an arbitrary number of players and an arbitrary number of enemies, what data should be cached in the server memory, in order to optimize smooth AI simulation?

Trying to explain, lets say player A sees player B to E, and enemy A to G. Each of those players, see player A, but not necessarily each other. Same applies to enemies. Think of this question from a topdown perspective please.

In many cases, for example, when a player shoots his gun, the server handles the sound as a radial "signal" that every other entity within reach "hear" and react upon.

Doing these searches all the time for a whole area, containing possibly a lot of unrelated players and enemies, seems to be an issue, when the budget for each AI agent is so small.

Should every entity cache whatever enters and exits from its radius of awareness? Is there a great way to trace the entities close by without flooding the memory with such caches?

What about other AI related problems that may arise, after assuming the previous one works well? We're talking about environments with possibly hundreds of enemies, a swarm.