Character.AI Gave Up on AGI. Now It’s Promoting Tales

“AI is dear. Let’s be sincere about that,” Anand says.

Progress vs. Security

In October 2024, the mom of a teen who died by suicide filed a wrongful dying swimsuit towards Character Applied sciences, its founders, Google, and Alphabet, alleging the corporate focused her son with “anthropomorphic, hypersexualized, and frighteningly practical experiences, whereas programming [the chatbot] to misrepresent itself as an actual particular person, a licensed psychotherapist, and an grownup lover.” On the time, a Character.AI spokesperson instructed CNBC that the corporate was “heartbroken by the tragic loss” and took “the security of our customers very critically.”

The tragic incident put Character.AI below intense scrutiny. Earlier this yr, US senators Alex Padilla and Peter Welch wrote a letter to a number of AI companionship platforms, together with Character.AI, highlighting issues about “the psychological well being and security dangers posed to younger customers” of the platforms.

“The workforce has been taking this very responsibly for nearly a yr now,” Anand tells me. “AI is stochastic, it is sort of arduous to at all times perceive what’s coming. So it is not a one time funding.”

That’s critically vital as a result of Character.AI is rising. The startup has 20 million month-to-month lively customers who spend, on common, 75 minutes a day chatting with a bot (a “character” in Character.AI parlance). The corporate’s consumer base is 55 p.c feminine. Greater than 50 p.c of its customers are Gen Z or Gen Alpha. With that progress comes actual danger—what’s Anand doing to maintain his customers protected?

“[In] the final six months, we have invested a disproportionate quantity of assets in with the ability to serve below 18 otherwise than over 18, which was not the case final yr,” Anand says. “I am unable to say, ‘Oh, I can slap an 18+ label on my app and say use it for NSFW.’ You find yourself creating a really completely different app and a distinct small-scale platform.”

Greater than 10 of the corporate’s 70 staff work full-time on belief and security, Anand tells me. They’re answerable for constructing safeguards like age verification, separate fashions for customers below 18, and new options resembling parental insights, which permit dad and mom to see how their teenagers are utilizing the app.

The under-18 mannequin launched final December. It contains “a narrower set of searchable Characters on the platform,” in line with firm spokesperson Kathryn Kelly. “Filters have been utilized to this set to take away Characters associated to delicate or mature matters.”

However Anand says AI security will take extra than simply technical tweaks. “Making this platform protected is a partnership between regulators, us, and oldsters,” Anand says. That’s what makes watching his daughter chat with a Character so vital. “This has to remain protected for her.”

Past Companionship

The AI companionship market is booming. Customers worldwide spent $68 million on AI companionship within the first half of this yr, a 200 p.c improve from final yr, in line with an estimate cited by CNBC. AI startups are gunning for a slice of the market: xAI launched a creepy, pornified companion in July, and even Microsoft payments its Copilot chatbot as an AI companion.

So how does Character.AI stand out in a crowded market? It takes itself out of it fully.