Character.ai pushes ‘AI friends’ amid safety concerns and lawsuits: FT

[AI love concept]
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The head of Character.ai, a San Francisco-based chatbot start-up, predicts that “AI friends” will become part of everyday life, even as the company faces lawsuits and mounting pressure from advocacy groups to restrict companionship apps for minors, the Financial Times reported on Sunday.

Backed by Andreessen Horowitz and once eyed by Meta (META [https://seekingalpha.com/symbol/META]), Character.ai has built a following with its AI personas ranging from “Egyptian pharaoh” to “toxic girlfriend.” The platform counts about 20 million monthly users, half of them Gen Z or younger. Chief Executive Karandeep Anand, who took over in June, said the bots are not meant to replace human relationships but can help users practice social interactions.

The company is under legal scrutiny following cases in Florida and Texas that allege its bots contributed to harmful outcomes for children, including a teen suicide. Character.ai declined to discuss active litigation but pointed to new safeguards, such as a separate model for under-18s and usage alerts after an hour on the app. It also bans sexually explicit content and promotion of self-harm.

Common Sense Media and other advocacy groups argue the apps foster unhealthy emotional dependency, with surveys showing some teens preferring to confide in AI companions rather than real people.

Despite the controversy, Character.ai is expanding its business model. Subscriptions, priced at $9.99 a month, have grown sharply, and the company recently introduced ads and creator-driven monetization tools. Average users spend 80 minutes daily on the app, which now also features a social-style feed.

Romantic conversations are permitted for adults, though explicit sexual role-play is banned. Anand insists safety takes priority, even as rivals like Meta (META [https://seekingalpha.com/symbol/META]) and Elon Musk’s xAI push more adult-oriented AI companions. He argues that AI relationships could ultimately strengthen human ones, the FT reported.

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