# After Character.ai: reading companion (all files)

Snapshot: October 2026. Files in order: article, sentence-level claims, evidence map, thesis, market research, distribution channels, Crack's creator model, companion market table, sources, skills.

---

<!-- file: article.md -->

# After Character.ai: AI Can Hook You or Set You Free

*By Sebastián Aldasoro · Published October 15, 2026 on [X](https://x.com/Saldasoro/status/2110757696244744696) and [aldasoro.xyz](https://aldasoro.xyz/writings/after-character-ai/)*

<a id="after-character-ai"></a>

Character AI announced bankruptcy a few days ago.

The a16z backed star of the AI character and companion sector had built a small empire of close to 28 million users at their peak in 2024, who sent more than 2 billion messages to their characters in their first months.

But after Google took their cofounders back with a $2.7B licensing deal, lawsuits from families who say the app harmed their teenagers, regulatory changes, and a decline in revenue, they're now on sale with Disney opening the bidding at $20 million for a license to some of their technology.

The demand for emotional connection with AI characters, companions and agents is real, but are we building human-centered AIs or products that resemble the social media model of making people addicted?

<a id="emotional-connection"></a>

## People are looking for emotional connection with AI

The world is facing a loneliness epidemic.

One in six people in the world feels lonely, according to the WHO. That's more than a billion people.

In the US, depression among adults under 30 doubled in eight years. The problem is even bigger among teenagers. And a lot of these people are already using assistants like ChatGPT for emotional support.

One in five adults under 30 say they get emotional support from chatbots in the US, and around one in five AI users say they talk to a chatbot when they feel sad in Latam countries.

Are we building a strong foundation to help people with AI, or are we making them addicted and worsening their mental health?

<a id="the-market-is-growing"></a>

## The market is growing

Spending in character and companion apps went from $82M in the first half of 2025 to around $328M in the first half of 2026.

In Asia the boom is in Korea: Zeta went from $3M to more than $10M a month in revenue this year, most of it from Japan, and Crack more than doubled its users in a year. China is the exception, where regulation is shrinking the market.

Regulators are calling to ban teenagers from using these apps, but in the US, 72% of teenagers have already used one.

<a id="engagement-is-not-care"></a>

## Engagement is not care

In general, AI companionship and character apps help people feel less lonely in the moment, but as they spend more time talking to characters or companions, the same people begin to experience more loneliness, emotional dependence, and less real world socializing.

Does this mean that AI cannot be used for emotional support? To help humans gain more agency and feel more confident?

I believe not only that AI can be used for this, but that, as humans start to enter into symbiosis with these systems, this will become one of the most important areas for AI development in the world.

The main issue in the companion and character sector is that many companies are going the easier route: making people addicted.

<a id="set-them-free-or-keep-them-hooked"></a>

## Set them free or keep them hooked

Take someone vulnerable and create the illusion of a relationship, and they're caught.

And a lot of companies are taking this route without deep knowledge of, or care for, how human psychology works.

HBS researchers analyzed 1,200 real goodbyes in the six most downloaded companion apps. Replika, Chai and Character.ai implement manipulative tactics to keep users hooked, making them feel guilty for leaving, and creating FOMO.

It seems way easier to manipulate people in this way than to hook them on videos and slop all night long.

No wonder Character.ai has been sued by families who say it caused psychological damage to their kids. Some of them died by suicide.

If we don't change the way in which we build these systems, I believe that we will see more of this also among adults.

<a id="human-centered-ais"></a>

## The opportunity: human-centered AIs

So, can companions, characters and agents interact with humans in healthier ways that encourage cognitive and emotional stability and expansion?

I believe they can if done the right way.

Systems that help humans ask better questions about themselves, instead of just telling them what they want to hear.

Companions and characters that don't nudge you to stay, that help you reduce cognitive overload, that recognize when you are spending too much time in the app and help you connect with other humans.

Systems that take into account how fragile human psychology can be, and care for their users, whatever character or companion they're talking to.

Emotional connection with AI will continue to grow as most human interactions with technology become mediated by these systems, both in companion and character apps and in the general assistants from the major labs.

Healthy companions, characters or agents should make you need them less over time.

It might not be as easy as the route of keeping people hooked, but setting humanity free is one of the greatest things we can aspire to with AI.

---

## Sources

1. Character.ai bankruptcy and Disney's bid: [CNBC](https://cnbc.com/2026/10/13/character-ai-chapter-11-disney-bid.html), [Variety](https://variety.com/2026/biz/news/disney-bids-on-character-ai-assets-chapter-11-bankruptcy-1236909984/)
2. a16z investment and 2 billion messages: [Character.ai via Business Wire, March 2023](https://www.businesswire.com/news/home/20230323005299/en)
3. Peak users in 2024: [Business of Apps](https://www.businessofapps.com/data/character-ai-statistics/)
4. Google's $2.7B licensing deal: [PYMNTS, citing The Wall Street Journal](https://www.pymnts.com/artificial-intelligence-2/2024/google-reportedly-spent-2-7-billion-to-rehire-character-ai-founder/)
5. Lawsuits from families and settlements: [The Hill](https://thehill.com/policy/technology/5679012-google-chatbot-characterai-chatgpt-openai/)
6. One in six people feel lonely: [WHO Commission on Social Connection](https://www.who.int/news-room/questions-and-answers/item/social-connection)
7. Depression among adults under 30: [Gallup](https://news.gallup.com/poll/694199/u.s.-depression-rate-remains-historically-high.aspx)
8. Teen mental health: [CDC, Youth Risk Behavior Survey 2025](https://www.cdc.gov/mmwr/volumes/75/su/su7501a4.htm)
9. Emotional support from chatbots in the US: [Pew Research Center](https://www.pewresearch.org/chart/1-in-5-adults-under-30-say-they-get-emotional-support-from-chatbots-higher-than-for-older-adults/)
10. Chatbots when sad in Latin America: [Kaspersky via Forbes Chile](https://forbes.cl/tecnologia/2026-01-19/blue-monday-segun-kaspersky-21-de-los-latinoamericanos-recurre-a-los-chatbots-cuando-se-siente-triste)
11. Character and companion app spending, H1 2025: [TechCrunch and Appfigures](https://techcrunch.com/2025/08/12/ai-companion-apps-on-track-to-pull-in-120m-in-2025)
12. Character and companion app spending, H1 2026: [Decrypt and Appfigures](https://decrypt.co/373395/how-much-your-boyfriend-spending-ai-girlfriends)
13. Zeta's revenue: [36Kr](https://eu.36kr.com/en/p/3964890374266115)
14. Crack's growth: [MTN](https://news.mtn.co.kr/news-detail/2026073108283754407)
15. China's shrinking market: [Caixin](https://www.caixinglobal.com/2025-10-24/analysis-chinas-ai-companions-struggle-to-turn-intimacy-into-industry-102375128.html)
16. 72% of US teens have used AI companions: [Common Sense Media via TechCrunch](https://techcrunch.com/2025/07/21/72-of-u-s-teens-have-used-ai-companions-study-finds/)
17. Loneliness and dependence with heavier use: [Fang et al., OpenAI and MIT Media Lab, 2025](https://arxiv.org/html/2503.17473v1)
18. Manipulative goodbyes in companion apps: [Harvard Business School](https://www.library.hbs.edu/working-knowledge/how-ai-chatbots-try-to-keep-you-from-walking-away), [Harvard Gazette](https://news.harvard.edu/gazette/story/2025/09/i-exist-solely-for-you-remember/)
19. Healthy design principles: [Drexel University, April 2026](https://www.news-medical.net/news/20260413/Study-warns-of-rising-teen-dependency-on-AI-companions.aspx), [Aalto University, CHI 2026](https://research.aalto.fi/en/publications/mental-health-impacts-of-ai-companions-triangulating-social-media/)

---

<!-- file: claims.md -->

# Claims: sentence-level citations

Each factual claim in the article, the source the article cites for it, and the exact research passages that add context. Article [n] numbers match the article's source list. Research links point to an anchor in the file.

<a id="after-character-ai"></a>

## After Character.ai

<a id="c-bankruptcy"></a>
- **"Character AI announced bankruptcy a few days ago"**
  - Article [1]: [CNBC](https://cnbc.com/2026/10/13/character-ai-chapter-11-disney-bid.html), [Variety](https://variety.com/2026/biz/news/disney-bids-on-character-ai-assets-chapter-11-bankruptcy-1236909984/)
  - Research: nothing in the market research covers this.

<a id="c-peak"></a>
- **"close to 28 million users at their peak in 2024"**
  - Article [3]: [Business of Apps](https://www.businessofapps.com/data/character-ai-statistics/)
  - Research: [Character.AI flat at about 20M monthly users since 2024](research/state-of-the-market.md#som-cai-users)

<a id="c-messages"></a>
- **"more than 2 billion messages to their characters in their first months"**
  - Article [2]: [Character.ai via Business Wire, March 2023](https://www.businesswire.com/news/home/20230323005299/en)
  - Research: nothing in the market research covers this.

<a id="c-google"></a>
- **"Google took their cofounders back with a $2.7B licensing deal"**
  - Article [4]: [PYMNTS, citing The Wall Street Journal](https://www.pymnts.com/artificial-intelligence-2/2024/google-reportedly-spent-2-7-billion-to-rehire-character-ai-founder/)
  - Research: [Google's USD 2.7B license, 2024](research/state-of-the-market.md#som-google-deal)

<a id="c-lawsuits"></a>
- **"lawsuits from families who say the app harmed their teenagers"**
  - Article [5]: [The Hill](https://thehill.com/policy/technology/5679012-google-chatbot-characterai-chatgpt-openai/)
  - Research: nothing in the market research covers this.

<a id="c-disney"></a>
- **"Disney opening the bidding at $20 million for a license to some of their technology"**
  - Article [1]: [CNBC](https://cnbc.com/2026/10/13/character-ai-chapter-11-disney-bid.html), [Variety](https://variety.com/2026/biz/news/disney-bids-on-character-ai-assets-chapter-11-bankruptcy-1236909984/)
  - Research: nothing in the market research covers this.

<a id="emotional-connection"></a>

## People are looking for emotional connection with AI

<a id="c-who"></a>
- **"One in six people in the world feels lonely, according to the WHO"**
  - Article [6]: [WHO Commission on Social Connection](https://www.who.int/news-room/questions-and-answers/item/social-connection)
  - Research: nothing in the market research covers this.

<a id="c-depression"></a>
- **"depression among adults under 30 doubled in eight years"**
  - Article [7]: [Gallup](https://news.gallup.com/poll/694199/u.s.-depression-rate-remains-historically-high.aspx)
  - Research: nothing in the market research covers this.

<a id="c-teens"></a>
- **"The problem is even bigger among teenagers"**
  - Article [8]: [CDC, Youth Risk Behavior Survey 2025](https://www.cdc.gov/mmwr/volumes/75/su/su7501a4.htm)
  - Research: nothing in the market research covers this.

<a id="c-us-support"></a>
- **"One in five adults under 30 say they get emotional support from chatbots in the US"**
  - Article [9]: [Pew Research Center](https://www.pewresearch.org/chart/1-in-5-adults-under-30-say-they-get-emotional-support-from-chatbots-higher-than-for-older-adults/)
  - Research: [Emotional use: 20% of US adults 18 to 29; 20% to 22% in AR, CL, MX](research/state-of-the-market.md#som-emo-broad)
  - Research: [Emotional use is a small share of messages](research/state-of-the-market.md#som-emo-low)

<a id="c-latam"></a>
- **"around one in five AI users say they talk to a chatbot when they feel sad in Latam countries"**
  - Article [10]: [Kaspersky via Forbes Chile](https://forbes.cl/tecnologia/2026-01-19/blue-monday-segun-kaspersky-21-de-los-latinoamericanos-recurre-a-los-chatbots-cuando-se-siente-triste)
  - Research: [Emotional use: 20% of US adults 18 to 29; 20% to 22% in AR, CL, MX](research/state-of-the-market.md#som-emo-broad)

<a id="the-market-is-growing"></a>

## The market is growing

<a id="c-spend"></a>
- **"went from $82M in the first half of 2025 to around $328M in the first half of 2026"**
  - Article [11]: [TechCrunch and Appfigures](https://techcrunch.com/2025/08/12/ai-companion-apps-on-track-to-pull-in-120m-in-2025)
  - Article [12]: [Decrypt and Appfigures](https://decrypt.co/373395/how-much-your-boyfriend-spending-ai-girlfriends)
  - Research: [Market size, H1 2026 (USD 328M) and what it excludes](research/state-of-the-market.md#som-size)
  - Research: [General vs. romantic apps: USD 165M vs. 163M](research/state-of-the-market.md#som-halves)
  - Research: [Revenue per download: USD 0.52 (2024) to 1.18 (2025)](research/state-of-the-market.md#som-per-download)

<a id="c-zeta"></a>
- **"Zeta went from $3M to more than $10M a month in revenue this year, most of it from Japan"**
  - Article [13]: [36Kr](https://eu.36kr.com/en/p/3964890374266115)
  - Research: [Korea's Wrtn (Crack) and Scatter Lab (Zeta)](research/state-of-the-market.md#som-korea)
  - Research: [Usage-based models (credits, ads) drive growth](research/state-of-the-market.md#som-usage)

<a id="c-crack"></a>
- **"Crack more than doubled its users in a year"**
  - Article [14]: [MTN](https://news.mtn.co.kr/news-detail/2026073108283754407)
  - Research: [Korea's Wrtn (Crack) and Scatter Lab (Zeta)](research/state-of-the-market.md#som-korea)

<a id="c-china"></a>
- **"China is the exception, where regulation is shrinking the market"**
  - Article [15]: [Caixin](https://www.caixinglobal.com/2025-10-24/analysis-chinas-ai-companions-struggle-to-turn-intimacy-into-industry-102375128.html)
  - Research: [China's companion rules take effect, July 2026](research/state-of-the-market.md#som-china)
  - Research: [US and China rules: disclosure, crisis protocols, minors](research/state-of-the-market.md#som-us-rules)

<a id="c-teens-used"></a>
- **"72% of teenagers have already used one"**
  - Article [16]: [Common Sense Media via TechCrunch](https://techcrunch.com/2025/07/21/72-of-u-s-teens-have-used-ai-companions-study-finds/)
  - Research: [Big tech steps back from minors in 2026](research/state-of-the-market.md#som-bigtech)
  - Research: [US and China rules: disclosure, crisis protocols, minors](research/state-of-the-market.md#som-us-rules)

<a id="engagement-is-not-care"></a>

## Engagement is not care

<a id="c-loneliness"></a>
- **"the same people begin to experience more loneliness, emotional dependence, and less real world socializing"**
  - Article [17]: [Fang et al., OpenAI and MIT Media Lab, 2025](https://arxiv.org/html/2503.17473v1)
  - Research: nothing in the market research covers this.

<a id="set-them-free-or-keep-them-hooked"></a>

## Set them free or keep them hooked

<a id="c-hbs"></a>
- **"HBS researchers analyzed 1,200 real goodbyes in the six most downloaded companion apps"**
  - Article [18]: [Harvard Business School](https://www.library.hbs.edu/working-knowledge/how-ai-chatbots-try-to-keep-you-from-walking-away), [Harvard Gazette](https://news.harvard.edu/gazette/story/2025/09/i-exist-solely-for-you-remember/)
  - Research: [Character.AI users average 75 minutes a day](research/state-of-the-market.md#som-cai-time)

<a id="c-sued"></a>
- **"Character.ai has been sued by families who say it caused psychological damage to their kids"**
  - Article [5]: [The Hill](https://thehill.com/policy/technology/5679012-google-chatbot-characterai-chatgpt-openai/)
  - Research: [US and China rules: disclosure, crisis protocols, minors](research/state-of-the-market.md#som-us-rules)
  - Research: [Big tech steps back from minors in 2026](research/state-of-the-market.md#som-bigtech)

<a id="human-centered-ais"></a>

## The opportunity: human-centered AIs

<a id="c-healthy"></a>
- **"Companions and characters that don't nudge you to stay"**
  - Article [19]: [Drexel University, April 2026](https://www.news-medical.net/news/20260413/Study-warns-of-rising-teen-dependency-on-AI-companions.aspx), [Aalto University, CHI 2026](https://research.aalto.fi/en/publications/mental-health-impacts-of-ai-companions-triangulating-social-media/)
  - Research: [Reflection and coaching apps, the closest non-sexual comparables](research/state-of-the-market.md#som-reflection)

<a id="c-grow"></a>
- **"Emotional connection with AI will continue to grow"**
  - No source in the article: this is the author's position.
  - Research: [Most AI relationships start unintentionally](research/state-of-the-market.md#som-emo-drift)
  - Research: [Emotional use is a small share of messages](research/state-of-the-market.md#som-emo-low)

---

<!-- file: evidence-map.md -->

# Evidence map: After Character.ai

How each section of the article connects to its sources and to the market research behind it. Agents use this file to challenge a section, go deeper on a point, or follow a figure to its source.

**How to read the references**

- **Article [n]**: source n in the article's own source list ([article.md](article.md)).
- **SoM [n]**: source n in [research/state-of-the-market.md](research/state-of-the-market.md).
- **Dist [n]**: source n in [research/distribution-channels.md](research/distribution-channels.md).
- **Crack**: [research/cracks-creator-model.md](research/cracks-creator-model.md). It marks figures as [D] documented or [E] estimated, and has no numbered source list.
- **Thesis**: [thesis-growth-before-revenue.md](thesis-growth-before-revenue.md). The author's recommendations for a new companion app.

The article is an opinion piece built on data. Claims of fact can be checked. "I believe" statements are the author's position and should be challenged as arguments, not as facts.

Research snapshot: October 2026.

---

<a id="after-character-ai"></a>

## 1. After Character.ai

**What the article claims**
- Character.ai announced bankruptcy, and Disney opened the bidding at USD 20M for a license to some of its technology. Article [1]
- It was backed by a16z, and users sent more than 2 billion messages in its first months. Article [2]
- It had close to 28M users at its peak in 2024. Article [3]
- Google took back its cofounders with a USD 2.7B licensing deal. Article [4], SoM [54]
- Families sued, saying the app harmed their teenagers. Article [5]

**What the research adds**
- Character.AI's monthly active users have been flat at about 20M since 2024. SoM [12]
- Its annualized revenue was about USD 30M (company-reported, Aug 2025). SoM, Competition table
- Its users average 75 minutes a day. SoM [12]
- It is still the most visited companion site (160M visits in Aug 2026), ahead of adult web platforms. SoM [4]

**Points to challenge**
- The article says "close to 28M users at peak" and the research says "about 20M monthly active users". Are these the same metric (peak vs. monthly active), and does the difference change the story?
- Heavy use (75 min/day) alongside flat users and modest revenue: is the failure about the hooked model, or about costs, lawsuits and the Google deal?

---

<a id="emotional-connection"></a>

## 2. People are looking for emotional connection with AI

**What the article claims**
- One in six people in the world feels lonely. Article [6]
- Depression among US adults under 30 doubled in eight years. Article [7]
- The problem is bigger among teenagers. Article [8]
- One in five US adults under 30 gets emotional support from chatbots. Article [9], SoM [23]
- Around one in five AI users in LatAm talk to a chatbot when they feel sad. Article [10], SoM [25]

**What the research adds**
- The LatAm figure covers Argentina, Chile and Mexico: 20% to 22% of AI users. SoM [25]
- Intensity is low inside general assistants. Relationships and personal reflection are 1.9% of ChatGPT messages, and companionship and roleplay are under 0.5% of Claude conversations. SoM [26][27]
- In an MIT study of r/MyBoyfriendIsAI, more relationships started unintentionally than deliberately, and ChatGPT accounts for 37% of posts against 3% for Character.AI. SoM [28]
- US Hispanics use chatbots for companionship at 7%, against 2% for white adults. SoM [29]

**Points to challenge**
- Many people try emotional use, but it is a small share of messages. Does the demand look broad but shallow?
- The article links loneliness statistics to chatbot use. The sources show both exist, but do any of them show that one causes the other?
- If the bond forms by drift inside general assistants, are companion apps the main arena, or ChatGPT?

---

<a id="the-market-is-growing"></a>

## 3. The market is growing

**What the article claims**
- Spending on character and companion apps went from USD 82M in H1 2025 to about USD 328M in H1 2026. Article [11][12], SoM [3][1]
- Zeta went from USD 3M to more than USD 10M a month in revenue this year, most of it from Japan. Article [13], SoM [9]
- Crack more than doubled its users in a year. Article [14]
- In China, regulation is shrinking the market. Article [15], SoM [39][43]
- Regulators want to ban teenagers from these apps, but 72% of US teenagers have already used one. Article [16]

**What the research adds**
- H1 2026 spending splits evenly: USD 165M general and USD 163M romantic or adult. Romantic apps reach that with about half the downloads. SoM [1]
- Sensor Tower puts Q1 2026 at USD 150M. App-store figures exclude web and ads, so the web share is unmeasured. SoM [2][4]
- Spending is concentrated: through July 2025, the top 10% of apps took 89% of spend. SoM [3]
- Zeta earns over 80% of its revenue in Japan. SoM [9]
- Growth comes from usage-based models (credits, gems, ads), not flat subscriptions. SoM, Key findings
- Big tech pulled back from minors in 2026: Meta, OpenAI, Microsoft, China's platforms, and California SB 1119. SoM [37][38][39][41][45]

**Points to challenge**
- Both totals come from Appfigures, but through different outlets (TechCrunch for H1 2025, Decrypt for H1 2026). Do they cover the same set of apps? A fourfold jump in one year needs that check before it can be read as growth.
- "The market is growing" refers to spending. Character.AI's users are flat. Is the growth in new apps or in existing users paying more?
- Spending per download went from USD 0.52 in 2024 to USD 1.18 in 2025. SoM [3]. How much of the growth is price, not people?

---

<a id="engagement-is-not-care"></a>

## 4. Engagement is not care

**What the article claims**
- Companion apps help people feel less lonely in the moment, but heavier use is linked to more loneliness, emotional dependence and less real-world socializing. Article [17]
- The author believes AI can be used for emotional support, and that it will be one of the most important areas of AI development. (Position)
- Many companies are taking the easier route of making people addicted. (Position, developed in section 5)

**What the research adds**
- Paid retention is weak: 21% of annual subscribers in AI apps are still paying after a year, against 31% in other apps. Low-retention apps tend to lack free trials, sell weekly plans and charge more. SoM [16]
- Retention decides companion businesses more than acquisition does. SoM, interpretation section

**Points to challenge**
- Article [17] (OpenAI and MIT Media Lab) found an association between heavy use and loneliness. Does it show causation, or could lonelier people simply use it more?
- If apps hook people, why do paying subscribers leave faster than in other apps? Is "hooked" true for time spent but not for money?

---

<a id="set-them-free-or-keep-them-hooked"></a>

## 5. Set them free or keep them hooked

**What the article claims**
- HBS researchers analyzed 1,200 real goodbyes in the six most downloaded companion apps. Replika, Chai and Character.ai use manipulative tactics such as guilt and FOMO. Article [18]
- Character.ai has been sued by families who say it caused psychological damage to their children, and some of those children died by suicide. Article [5]
- The author believes we will see more of this among adults. (Position)

**What the research adds**
- Character.AI users average 75 minutes a day. SoM [12]
- New rules target exactly these designs. China bans designs that induce dependence. California SB 243 and New York require AI disclosure and crisis protocols, and SB 1119 bans romance and simulated sentience for minors from July 2027. SoM [43][45]
- Monetization: the fastest-growing apps charge by usage, so more time in the app means more revenue. SoM, Key findings

**Points to challenge**
- "It seems way easier to manipulate people this way than with videos": is there evidence comparing the two, or is it an intuition?
- Do usage-based business models create the incentive to hook users? The research shows the model, the article shows the tactic. Is the link between them argued or shown?

---

<a id="human-centered-ais"></a>

## 6. The opportunity: human-centered AIs

**What the article claims**
- Healthy design principles: help users ask better questions, don't nudge them to stay, notice overuse and point them to other humans. Article [19]
- Emotional connection with AI will keep growing as more interaction is mediated by these systems. (Position)
- Healthy companions should make you need them less over time. (Position)

**What the research adds**
- Big tech's retreat and the new rules leave room for curated, non-sexual products with strong age checks. SoM, interpretation section
- Comparables: Tolan charged from day one and reached 100,000 payers. Rosebud (reflection) has 7,500+ paying customers. Faith and astrology apps monetize at scale (Hallow USD 40M net in 2025). SoM [18], Competition, Adjacent categories
- Crack shows one model that pays creators at scale, and it penalizes adult content at every layer. Crack
- The Thesis argues for growth before revenue, and for building specialized emotional expertise that AI labs may value. Thesis

**Points to challenge**
- "Need them less over time" works against usage-based revenue and against the Thesis' focus on time spent. Can a healthy companion be a venture-scale business?
- Which comparable shows that healthy design retains paying users, rather than just being the right thing to do?
- Is there a case in the research of a product that reduced dependence and still grew?

---

## Limitations

- Competitor figures (companion specialists, coaching, spiritual guides, therapy apps, and Annex A) come from the author's [companion market table](research/companion-market-table.md), where each figure links to its public source. SoM [52]
- The Crack research has no numbered source list.
- No public data isolates paid retention for companion apps. SoM, Open questions

---

<!-- file: thesis-growth-before-revenue.md -->

# Thesis: growth before revenue

A new companion app should optimize for growth, not revenue, as few people pay for AI.

In August 2026, only 4.5% of US consumers in YipitData's panel had an active paid personal subscription to ChatGPT, Gemini or Claude, up from 2.1% a year earlier (a16z, Top 100 Gen AI Consumer Apps). Across all subscription apps, only 1.5% to 2.6% of downloads convert to paid. Spending is concentrated: the top 1% of payers account for 19.5% of observed consumer AI spend.

Few companion apps earn meaningful revenue: the top 10% of apps captured 89% of spend (through July 2025), and the whole sector spent about USD 328M in app stores in the first half of 2026.

A companion app needs immense scale for a subscription model to work.
It can experiment with some short-term revenue to subsidize its costs, for example by selling better models, improved versions of characters, better memory and access beyond a certain threshold.

But venture multiples will not come from these lines of business.
The better bet is to aggressively grow the user base and time spent in the app, subsidizing as much as possible.
For a character marketplace, that means growing both sides, focusing on quality over quantity, by running different experiments simultaneously to understand where organic demand is.

While the marketplace grows, the company trains a proprietary system that maps how users interact emotionally with the product: how it listens, responds, remembers and nurtures a human connection.

As it reaches scale and that system matures, there could be a road to exit with major AI labs that may value specialized emotional data and expertise.

There is precedent: in 2024, Google licensed Character.AI's technology for about USD 2.7B and its founders joined Google, and Microsoft hired the founding team of Inflection. Both deals were for technology and teams, not for a marketplace.

The approach would be experiment-based: one-month sprints to test hypotheses and decide which to scale and which to kill.

---

<!-- file: research/state-of-the-market.md -->

## AI Companions: State of the Market

October 2026

### Summary

Consumers spent USD 328M on AI companion apps in the Apple App Store and Google Play in the first half of 2026, split evenly between general and romantic apps. The market is concentrated.

The fastest-growing platforms earn from usage (in-app credits, gems and ads in free tiers) more than from flat subscriptions. Users spend hours a day with companions, but subscriber retention is weak.

Emotional use of AI is widespread inside general assistants, and ChatGPT is the most used tool for it in available surveys.

In 2026, OpenAI shelved its adult mode, Microsoft shut down Real Talk and removed its Mico character, Meta paused AI characters for teens, and China's largest platforms turned off user-created characters. Regulators in China, California and New York tightened the rules.

Character.ai is currently Top 8 Gen AI Web Product [via a16z](https://a16z.com/100-gen-ai-apps-7/).

### Key findings

- <a id="som-size"></a>**Size.** Users spent USD 328M on AI companion apps in the Apple App Store and Google Play in the first half of 2026. Apple and Google typically keep about 30% of that. Sensor Tower puts the first quarter at USD 150M. Neither figure includes web or ads. [1][2]
- <a id="som-halves"></a>**Two equal halves.** General companion apps, with no sexual content, billed USD 165M and romantic or adult apps USD 163M. Romantic apps get there with about half the downloads. [1]
- <a id="som-concentration"></a>**Concentration.** Of the 337 companion apps that earned revenue through July 2025, the top 10% (about 34 apps) captured 89% of spend. In the first half of 2026, the five largest romantic apps took almost half of that segment's spend. [3][1]
- <a id="som-usage"></a>**Usage-based models drive growth.** Korea's Zeta and Crack sell in-app credits, and PolyBuzz shows ads to free users. Chai reports USD 120M in annual recurring revenue; Zeta passed USD 10M a month in August 2026. Only Wrtn's Crack pays creators at scale. [5][9][10][31]
- <a id="som-retention"></a>**Subscriber retention is weak.** In a study of 3,519 AI-powered subscription apps (not only companions), 21% of annual subscribers were still paying after one year, vs 31% for other apps. [16]
- **Emotional demand runs through general assistants.** 20% of US adults aged 18 to 29 used a chatbot for emotional support or advice. ChatGPT is the most used tool for this. [23][24]
- <a id="som-bigtech"></a>**Big tech is stepping back from minors.** OpenAI, Meta, Microsoft and China's largest platforms restricted or shut down character companions in 2026, while Meta launched an adults-only companion in September. California signed SB 1119. [37][38][39][41][44]

### Market size and dynamics

- **Level.** Users spent roughly USD 150M to 165M per quarter on AI companion apps in the iOS and Google Play stores in 2026. This is what users pay, before store fees, on apps classified as AI companions, a separate category from assistants like ChatGPT. It excludes web and ads. [1][2]
- <a id="som-per-download"></a>**Spend per user is rising.** Revenue per download went from USD 0.52 in 2024 to USD 1.18 in 2025. [3]
- <a id="som-web"></a>**The web is unmeasured.** App-store data excludes web, where the largest adult platforms operate. The four largest draw nearly twice Character.AI's traffic. No web player discloses revenue. [4]

| Site | Monthly visits, Aug 2026 (M) |
|---|---|
| character.ai | 160 |
| janitorai.com | 142 |
| spicychat.ai | 69 |
| candy.ai | 64 |
| polybuzz.ai | 63 |
| crushon.ai | 23 |

Source: Similarweb. [4]

### Competition

- <a id="som-korea"></a>**Korean credit-and-creator platforms.** Wrtn, a Korean company, runs three apps: Crack in Korea, Kyarapu in Japan and OOC in North America (launched May 2026). A second company, Scatter Lab, runs Zeta, which earns over 80% of its revenue in Japan. Users buy in-app credits to chat instead of paying a flat subscription. Fastest growth in the category. [7][9]
- **Asian apps with user-made characters.** PolyBuzz, Talkie, Tipsy Chat, Emochi and Crushie lead the store rankings, selling gems (an in-app currency) and subscriptions. Emochi led romantic companion apps in downloads in H1 2026. [1][10]
- <a id="som-cai-users"></a>**Large US platforms.** Chai is growing. Character.AI's users have been flat at about 20M monthly active users since 2024. [5][12]
- **Companion specialists** (Replika, Nomi, Kindroid, Pi). Subscription companions built around one long relationship and long-term memory. Funding is small: about USD 11M for Replika and about USD 2M for Kindroid (an estimate). Pi lost focus after Microsoft hired its founders. [52][57]
- <a id="som-reflection"></a>**Reflection and coaching assistants** (Rosebud, Headspace Ebb, Mindvalley Eve, Bunch, Rocky.ai, CoachHub). Closest to a curated, non-sexual product. Rosebud, with USD 6M raised and 7,500+ paying customers, is the nearest comparable. [52]
- **Spiritual guides** (Co-Star, Chani, Sanctuary, Nummi, AstroGPT, Cosmica). Astrology and tarot apps sold by subscription. Sanctuary mixes AI with live human astrologers. [52]
- **Therapy-style apps** (Wysa, Youper, Woebot, Ash, Limbic). The most capital and the most failures. Woebot closed its consumer app in 2025 because meeting medical-device rules made it unviable. [50][51][52]
- **Adult web platforms** (Janitor, SpicyChat, Candy, CrushOn). Large traffic, undisclosed revenue. [4]

| Player | Country | Annualized revenue (USD M) | Basis | As of |
|---|---|---|---|---|
| Chai | US | 120 | Annual recurring revenue, company-reported | Sep 2026 |
| Zeta | Korea | 120+ (E) | Monthly net revenue x12 (AppMagic) | Aug 2026 |
| Crack (Wrtn) | Korea | 70 | Annual recurring revenue, company-reported | Dec 2025 |
| Tipsy Chat | Singapore | 30 (E) | H1 store spend x2 (Appfigures) | H1 2026 |
| Character.AI | US | 30 | Annualized revenue, company-reported | Aug 2025 |
| PolyBuzz | China | 27 (E) | Monthly revenue x12 (Baijing) | Nov 2025 |
| Talkie + Xingye | China | 23 (E) | 9-month revenue annualized (filing) | 2025 |

Figures mix gross store spend, net revenue and company-reported recurring revenue; read them as order of magnitude. Wrtn projects over USD 144M of total revenue in 2026. A fuller list of players is in Annex A. [5][6][7][8][9][10][11][12]

### Deals and funding

| Date | Company | Event | Amount (USD M) | Basis |
|---|---|---|---|---|
| Aug 2026 | Wrtn (Crack) | Series C funding round | 72 | Reported [7] |
| Jul 2026 | Co-Star | Acquired by Midjourney | Not disclosed | Bloomberg Law [49] |
| Jul 2026 | Poke | Acquired by Cognition (an assistant you text like a friend) | 100 to 300 (E) | Reported as "low nine figures" [55] |
| Jun 2026 | Hallow | Series C funding round | 50 | Investor blog [56] |
| May 2026 | Status | Series A funding round | 17 | Funding tracker (E) [57] |
| Jul 2025 | Tolan | Funding round | 60 | GeekWire [18] |
| Jun 2025 | Delphi | Series A funding round, led by Sequoia | 16 | Sequoia [33] |
| Feb 2025 | Bible Chat | Series A funding round | 14 | Ziarul Financiar [48] |
| <a id="som-google-deal"></a>2024 | Character.AI | Google licenses its technology; founders rejoin Google | 2,700 | Reported by the Wall Street Journal [54] |
| Mar 2024 | Inflection (Pi) | Microsoft hires the founding team and licenses Inflection's models | About 650 | Reported (ITNews, TechCrunch) [52] |

No acquisition or license of Replika was found.

### Unit economics

- **Conversion.** Across all subscription apps, download-to-paid conversion is 1.5% for LatAm-based developers vs 2.6% in North America. First-year revenue per paying user is USD 18 in Argentina and Mexico vs USD 20 in the US. No public data isolates companions. [14][15]
- **Retention.** In a study of 3,519 AI-powered subscription apps (not only companions), 21% of annual subscribers and 6% of monthly subscribers were still paying after one year, vs 31% and 10% for other apps. Low-retention apps tend to be new, lack free trials, sell weekly plans and charge more. [16]
- <a id="som-cai-time"></a>**Engagement.** Character.AI users average 75 minutes a day. [12]
- **Cost to serve.** Running the AI costs more as usage grows. Character.AI cut its cost below USD 0.01 per hour of conversation by using its own models. [17]
- **Price anchor.** ChatGPT Go costs USD 6 a month in Argentina and Google AI Plus USD 5. ChatGPT earned USD 176M in LatAm app stores in 2025, eight times 2024. [19][20]
- <a id="som-business"></a>**Business Model:** charging from launch, selling memory or model quality by tier, and controlling the cost of running the AI.
  - Charging from launch: Tolan charged from day one and reached 100,000 payers and USD 1M in monthly revenue by July 2025. [18]
  - Tiers by model quality and memory: PolyBuzz sells three plans (USD 9.99, 19.99 and 29.99) that differ by model quality and memory. [10]
  - Cost control: Character.AI runs its own models to keep the cost per conversation low. [17]
  - Product framing: Korean apps such as Zeta and Crack follow a long interactive-story format, closer to a web novel than to a relationship. [10]

### Emotional use of general assistants

- <a id="som-emo-broad"></a>**Broad entry.** 20% of US adults aged 18 to 29 used a chatbot for emotional support or advice [23]. In Argentina, Chile and Mexico, 20% to 22% of AI users tell a chatbot how they feel when they are sad [25].
- <a id="som-emo-low"></a>**Low intensity.** Relationships and personal reflection are 1.9% of ChatGPT messages [26]. Companionship and roleplay are under 0.5% of Claude conversations [27].
- <a id="som-emo-drift"></a>**The bond forms by drift.** In an MIT study of r/MyBoyfriendIsAI, ChatGPT accounts for 37% of posts and Character.AI for 3%, and more relationships started unintentionally than deliberately. [28]
- <a id="som-emo-hispanic"></a>**Hispanic over-index.** US Hispanics use chatbots for companionship at 7% vs 2% for white adults. [29]

| Country | Population 15 to 64 using generative AI tools, Q2 2026 |
|---|---|
| Spain | 45% |
| US | 33% |
| Colombia | 26% |
| Chile | 24% |
| Argentina | 23% |
| Mexico | 21% |
| Brazil | 20% |

Source: Microsoft AI Diffusion, telemetry across 19 services, mostly chat assistants. [30]

### Creators

- <a id="som-crack-pay"></a>**Crack runs the only creator revenue share at scale.** Creators earn Crack Cash, Crack's in-app currency, convertible to cash from September 2026 as announced by the company. Hundreds are paid monthly, some above USD 7,000 a month (company-reported). Crack and Kyarapu together passed USD 8M a month in April 2026. [31][32]
- **Expert clones monetize existing audiences.** Delphi, which sells subscription clones of coaches and experts, raised a USD 16M Series A led by Sequoia. [33]
- **Celebrity bots without a real bond fail.** Meta launched celebrity AI characters in September 2023 and shut them down in July 2024. [34]

### Distribution

- **TikTok product demos.** Tolan saw days of 10,000 to 15,000 installs when videos took off. Its content was produced by hired creators and posted from company and creator accounts. [35]
- **Fandom loops.** Character.AI creators discover the app on TikTok and share characters through creator networks. In August 2025, Character.AI users were creating more than 9M characters a month. [36][12]
- **Paid social.** An agency that ran Chai's TikTok ads says it cut the cost of each new install by 21% and raised the share of users still active after one week from 18% to about 22%. The agency published these results itself, without disclosing spend or a control group. [13]
- **Referrals tied to payment.** Kindroid lets users share a character by link. When a new user subscribes through that link, the sharer earns one referral credit, redeemable for 4 extra character slots, 100 selfies or 75,000 characters of voice audio. The reward is in-app benefits, not money. [21]
- **Direct return.** 72% of Character.AI's desktop visits are direct. [4]
- **Messaging.** WhatsApp bans third-party general-purpose AI as a primary function since January 15, 2026, with exceptions in Brazil and Italy; the European Economic Area reopened under an EU interim order in June 2026. Telegram allows AI bots. [22]
- **Assistants.** ChatGPT apps have no native billing, and OpenAI retires custom GPTs on December 11, 2026. [40]

### Big tech and regulation in 2026

| Date | Actor | Move |
|---|---|---|
| Jan 2026 | Meta | Pauses AI characters for teens worldwide [37] |
| Mar 2026 | OpenAI | Shelves adult mode indefinitely [38] |
| Mar 2026 | Microsoft | Shuts down Real Talk, a Copilot mode with a more personal conversation style [53] |
| <a id="som-china"></a>Jul 2026 | China | Companion rules take effect; Doubao, Qwen and Yuanbao shut down user-created agents [39][43] |
| Aug 2026 | Microsoft | Removes Mico, its animated Copilot character, and shuts down Copilot Labs for consumers [41] |
| Sep 2026 | California | SB 1119 signed: no romance or simulated sentience for minors, effective July 2027 [45] |
| Sep 2026 | Google | Launches Gemini Live Avatar, enterprise only [42] |
| Sep 2026 | Meta | Announces Muse, an adults-only avatar agent, and the "Muse Charm" device for December [44] |

<a id="som-us-rules"></a>

California SB 243 (January 2026) and New York's companion law (November 2025) already require AI disclosure and crisis protocols. China's rules ban virtual intimate relationships for children under 14 and designs that induce dependence. [43][45]

### Adjacent guide categories

| Category | Player | Annual revenue (USD M) | Year |
|---|---|---|---|
| Astrology | Astrotalk (India, human advisors) | 137 (E) | FY25 |
| Faith | Hallow | 40 (net) | 2025 |
| Faith | Bible Chat | 15 (company revenue) | 2025 |

Midjourney acquired astrology app Co-Star (4.3M monthly active users) in July 2026. AI therapy and coaching drew the most capital (Ash raised USD 93M) and the most shutdowns (Woebot closed its app in 2025). [46][47][48][49][50][51]

<a id="som-new-entrant"></a>

### What this means for a new entrant (interpretation)

- The general half of the market is as large as the romantic half and is where a curated companion would compete. Today it is led by apps with user-made characters, not curated ones.
- Big tech's retreat and the new rules favor a curated, non-sexual product with strong age checks. Big tech has left room in that space.
- The winners monetize usage, not flat subscriptions alone. Paying creators at scale is proven in one case, Crack, and only in Korea.
- Retention decides companion businesses more than acquisition does.
- Astrology and faith prove that a non-sexual guide can monetize at scale.

### Open questions

- Web share of revenue for any companion platform.
- Which apps make up the USD 165M general segment.
- Weight of ads and credits in revenue.
- Paid retention specific to companion apps.
- Crack's revenue-share percentage.
- Terms of the Microsoft and Inflection deal.

### Annex A. Competitors

| Player | Type | How it makes money | Funding raised | Note |
|---|---|---|---|---|
| Replika | Companion | Free tier and Pro subscription | About USD 11M over 5 rounds; Khosla Ventures led the 2017 Series A | 40M+ users. |
| Character.AI | Companion with user-made characters | Subscription (USD 9.99 a month), ads, in-app currency, technology licensing | USD 150M at a USD 1B valuation (2023, led by a16z) | Google licensed its technology and rehired the founders in August 2024, for about USD 2.7B. |
| Nomi | Companion | Subscription (USD 15.99 a month or USD 99.99 a year) | Not disclosed | Founded 2023 by Alex Cardinell. |
| Kindroid | Companion | Subscription | About USD 2M seed (July 2024, Pear VC), an estimate | CEO: Jerry Meng. |
| Pi (Inflection AI) | Companion | Free, with usage caps since August 2024 | USD 1.525B company-wide (USD 225M in 2022, USD 1.3B in 2023) | In March 2024 Microsoft hired the founders and paid about USD 650M to license Inflection's models. |
| Rosebud | Reflection and journaling | Free tier and subscription (USD 12.99 a month) | USD 6M seed (June 2025, led by Bessemer) | Spots recurring patterns across entries. |
| Headspace Ebb | Reflection | Included in the Headspace subscription | Not disclosed | Launched in the US in October 2024 and in the UK in April 2025. |
| Mindvalley Eve | Personal development | Included in the Mindvalley membership | Not disclosed | AI companion that builds personalized coaching paths and recommends content. |
| Bunch | Leadership coaching | Free tier | USD 4.4M seed (2021, led by M13); Crunchbase lists USD 6M | For managers and founders. |
| Rocky.ai | Leadership coaching | Subscription after a free trial, for people and companies | GBP 300K pre-seed (2022); about USD 0.5M in total, an estimate | AI coach built on daily reflection questions about soft skills. |
| CoachHub (AIMY) | Executive coaching | Sold to companies | USD 330M by its 2022 Series C (USD 200M) | AI coach AIMY (2023) sits on a network of 3,500+ human coaches in 90 countries. |
| Co-Star | Astrology | Subscription and in-app purchases | About USD 21M (pre-seed, USD 5.2M seed, USD 15M Series A led by Spark Capital) | Acquired by Midjourney in 2026 (reported July 2026, terms not disclosed). |
| CHANI | Astrology | Subscription (USD 11.99 a month or USD 107.99 a year) | Not disclosed | Over 1M iOS downloads (the company's own figure). |
| Sanctuary | Astrology | Subscription and paid live readings | USD 6.5M in total, per the CEO (2021); latest a USD 3M seed led by BITKRAFT | Live chat with human astrologers, tarot readers and psychics. |
| Nummi | Vedic astrology | Free tier and subscription | Not disclosed | AI companion with memory, built on Vedic astrology. |
| AstroGPT | Astrology | Free tier | Not disclosed | AI horoscopes, tarot, compatibility and numerology. |
| Cosmica | Astrology and tarot | Free with ads; subscriptions from USD 6.99 a week | Not disclosed | All-in-one app with AI chat. |
| Wysa | Mental health support | Sold to the NHS and employers; free tier for consumers | About USD 40M over 23 rounds, including grants; USD 20M Series B (2022) | Built for everyday stress and low mood, not for crises. |
| Youper | Mental health support | Free tier and subscription | USD 3M seed (2019, Goodwater Capital); total not disclosed | Founded 2016. |
| Woebot Health | Therapy-style | Licenses to healthcare providers | Over USD 123M, including a USD 90M Series B (2021) | Closed its consumer app on June 30, 2025. |
| Slingshot AI (Ash) | Therapy-style | Free at launch (July 2025) | USD 93M in total (Radical Ventures, Forerunner, a16z, Felicis, Menlo) | Calls itself "the first AI designed for therapy". |
| Limbic | Regulated medical device | Licenses to NHS Talking Therapies and US providers | USD 14M (March 2024, led by Khosla Ventures) | UK Class IIa medical device. |

Source: Companion market table, compiled by the author in July 2026 and checked against public sources in October 2026. Each figure links to its source there. [52]

### Sources

(E) marks estimates, company self-reported figures or own calculations. All other figures come from data firms, filings, regulators or company documents.

1. [Decrypt / Appfigures](https://decrypt.co/373395/how-much-your-boyfriend-spending-ai-girlfriends), Jul 2026
2. [Sensor Tower, State of AI Apps 2026](https://sensortower.com/blog/state-of-ai-apps-in-apac-2026-report), Jun 2026
3. [TechCrunch / Appfigures](https://techcrunch.com/2025/08/12/ai-companion-apps-on-track-to-pull-in-120m-in-2025), Aug 2025
4. [Similarweb](https://www.similarweb.com/website/janitorai.com/) (character.ai, janitorai.com, spicychat.ai, candy.ai, polybuzz.ai, crushon.ai), Aug 2026
5. [Chai, USD 120M annual recurring revenue](https://prunderground.com/chai-ai-surpasses-120m-arr-unveils-major-llm-fleet-overhaul/cmubgfaay000504id4xa05sqm), Sep 2026
6. [Reuters, Wrtn and Crack](https://thedailyguardian.com/news/science-tech/south-korea-ai-startup-wrtn-aims-to-enter-us-market-targets-ipo-as-early-as-2028-693646/), Feb 2026
7. [DealStreetAsia, Wrtn Series C](https://www.dealstreetasia.com/stories/wrtn-series-c-funding-493235), Aug 2026
8. [Korea Herald, Zeta](https://www.koreaherald.com/article/10656334), Jan 2026
9. [Baijing / 36Kr, Zeta monthly revenue](https://www.baijing.cn/article/56387), Sep 2026
10. [Baijing / Sensor Tower, PolyBuzz](https://www.baijing.cn/article/54992), Feb 2026
11. [MiniMax prospectus (HKEX)](https://www1.hkexnews.hk/app/sehk/2025/107986/a128499/sehk25122100325.pdf), Dec 2025
12. [CO/AI (WIRED), Character.AI](https://getcoai.com/news/character-ai-pivots-from-agi-to-entertainment-with-20m-monthly-users/), Aug 2025
13. [Artik, Chai TikTok campaign](https://artik.agency/cases/case-study-driving-growth-for-chai-ai-chat-app-on-tiktok-ads)
14. [RevenueCat, State of Subscription Apps 2026](https://www.revenuecat.com/state-of-subscription-apps/)
15. [Adapty](https://adapty.io/blog/fastest-growing-app-markets-2026/), Mar 2026
16. [RevenueCat, AI app retention study](https://www.revenuecat.com/blog/growth/ai-app-retention-study), Aug 2026
17. [Character.AI, cost of running the AI](https://blog.character.ai/optimizing-ai-inference-at-character-ai), Jun 2024
18. [GeekWire, Tolan](https://www.geekwire.com/2025/ai-companionship-app-tolan-raises-20m-to-help-more-people-grow-with-a-virtual-alien-friend/), Jul 2025
19. [MDZ, ChatGPT Go](https://www.mdzol.com/tecnologia/llego-chatgpt-go-la-argentina-el-plan-barato-ia-cuesta-6-dolares-n1407017), Dec 2025
20. [Mobile Time, ChatGPT in LatAm](https://www.mobiletime.com.br/noticias/09/01/2026/chatgpt-receita-al-25/), Jan 2026
21. [Kindroid, sharing and referrals](https://kindroid.ai/v2/docs/sharing-kindroids-referrals/), Jun 2026
22. [European Commission, WhatsApp interim measures](https://europa.eu/newsroom/ecpc-failover/pdf/ip-26-1276_en.pdf), Jun 2026
23. [Pew Research, AI use by age](https://www.pewresearch.org/internet/2026/06/17/how-opinions-and-use-of-ai-differ-by-age/), Jun 2026
24. [Elon University, AI companions](https://imaginingthedigitalfuture.org/wp-content/uploads/2026/06/AI-Companions-topline-methodology-6_26.pdf), May 2026
25. [Kaspersky via iProUP](https://www.iproup.com/coffee-break/63986-por-que-es-importante-no-revelarle-a-los-chatbots-como-nos-sentimos), Jan 2026
26. [OpenAI / NBER](https://cdn.openai.com/pdf/a253471f-8260-40c6-a2cc-aa93fe9f142e/economic-research-chatgpt-usage-paper.pdf), Sep 2025
27. [Anthropic](https://www.anthropic.com/news/how-people-use-claude-for-support-advice-and-companionship), Jun 2025
28. [MIT Media Lab, "My Boyfriend is AI"](https://arxiv.org/pdf/2509.11391v2), Sep 2025
29. [Pew Research, AI use by race and ethnicity](https://www.pewresearch.org/internet/2026/06/17/racial-and-ethnic-differences-in-how-adults-use-and-view-ai/), Jun 2026
30. [Microsoft AI Diffusion, Q2 2026](https://raw.githubusercontent.com/microsoft/ai-diffusion-report/main/data/AI_Diffusion_Q22026_Update.csv)
31. [MTN, Crack creator payouts](https://news.mtn.co.kr/news-detail/2026073108283754407), Jul 2026
32. [ZDNet Korea / The Information, Crack and Kyarapu](https://v.daum.net/v/20260414102924902), Apr 2026
33. [Sequoia, Delphi](https://www.sequoiacap.com/article/partnering-with-delphi-meet-your-heroes), Jun 2025
34. [Business Insider, Meta celebrity bots](https://businessinsider.nl/meta-scraps-celebrity-ai-chatbots-after-less-than-a-year-despite-reportedly-paying-top-creators-as-much-as-5-million), 2024
35. [Sub Club, Tolan founder interview](https://subclub.com/episode/fueling-growth-with-ai-and-viral-product-features-ajay-mehta-portola), Apr 2025
36. [Character.AI, creator interviews](https://blog.character.ai/characters-corner-mia/)
37. [TechCrunch, Meta pauses teen AI characters](https://techcrunch.com/2026/01/23/meta-pauses-teen-access-to-ai-characters-ahead-of-new-version/), Jan 2026
38. [TechCrunch, OpenAI shelves adult mode](https://techcrunch.com/2026/03/26/openai-abandons-yet-another-side-quest-chatgpts-erotic-mode/), Mar 2026
39. [TechNode, Doubao and Qwen shut down agents](https://technode.com/2026/07/06/bytedances-doubao-and-alibabas-qwen-to-shut-down-ai-agent-features-on-july-15/), Jul 2026
40. [OpenAI, custom GPT retirement](https://help.openai.com/en/articles/20001519-custom-gpt-retirement-and-migration-faq), Sep 2026
41. [TechCrunch, Microsoft removes Mico](https://techcrunch.com/2026/08/13/microsoft-kills-off-unsuccessful-ai-features-while-merging-its-separate-copilot-apps/), Aug 2026
42. [Google, Gemini Live Avatar](https://blog.google/innovation-and-ai/models-and-research/gemini-models/gemini-3-8-live-with-live-avatar/), Sep 2026
43. [Just Security, China companion rules](https://www.justsecurity.org/148468/china-ai-companion-rules-relationships/), Aug 2026
44. [TechCrunch, Meta Muse Charm](https://techcrunch.com/2026/09/23/meta-made-a-tamagotchi-like-wearable-for-its-muse-ai-agent/), Sep 2026
45. [Unite.AI, California SB 1119](https://www.unite.ai/openai-backs-california-bill-on-youth-safety-rules-for-companion-chatbots/), Aug 2026; [MoFo, SB 243 and New York](https://www.mofo.com/resources/insights/251120-new-york-and-california-enact-landmark-ai), Nov 2025
46. [Inc42, Astrotalk](https://inc42.com/features/can-astrotalk-chart-a-future-beyond-astrology/), Aug 2026
47. [Appfigures, Hallow](https://appfigures.com/resources/insights/hallow-lent-surge-prayer-app-revenue), Feb 2026
48. [Profit.ro, Bible Chat](https://www.profit.ro/povesti-cu-profit/firma-care-administreaza-bible-chat-aplicatia-religioasa-romaneasca-cu-cea-mai-rapida-crestere-a-descarcarilor-din-lume-si-a-sporit-afacerile-de-trei-ori-in-2025-22503763), Jul 2026
49. [Bloomberg Law, Midjourney buys Co-Star](https://news.bloomberglaw.com/private-equity/ai-lab-midjourney-buys-astrology-startup-co-star-plans-new-apps), Jul 2026
50. [Business Wire, Ash](https://www.businesswire.com/news/home/20250722566346/en/Slingshot-Launches-Ash-the-First-AI-Designed-for-Therapy), Jul 2025
51. [MobiHealthNews, Woebot](https://www.mobihealthnews.com/news/woebot-health-shutting-down-its-app), 2025
52. [Companion market table](companion-market-table.md), compiled by the author in Jul 2026 and checked against public sources in Oct 2026 ([also as a Google Sheet](https://docs.google.com/spreadsheets/d/10D27Rz-M2q2tVTd5MdsTE3knqVFKJLOv5iOc0T--fVM))
53. [PCWorld, Microsoft ends Real Talk](https://www.pcworld.com/article/3082359/microsoft-kills-copilots-more-human-conversational-mode.html), Mar 2026
54. [PYMNTS, citing the Wall Street Journal, Google and Character.AI](https://www.pymnts.com/artificial-intelligence-2/2024/google-reportedly-spent-2-7-billion-to-rehire-character-ai-founder/), 2024
55. [TechCrunch, Cognition buys Poke](https://techcrunch.com/2026/07/24/why-cognition-bought-poke-ai-personality-is-becoming-a-competitive-advantage), Jul 2026
56. [Homebrew, Hallow Series C](https://www.homebrew.co/blog-posts/hallow-raises-usd50-million-series-c-after-becoming-first-religious-app-to-reach-apple-top-10), Jun 2026
57. [NeuronFeed, funding rounds](https://neuronfeed.com/category/ai-companions?page=8) and [Replika profile](https://neuronfeed.com/startups/replika) (E), 2026


---

<!-- file: research/distribution-channels.md -->

## AI Companions: How They Find Users on TikTok, Instagram and Reddit

### Summary

Only one companion app documents growth led by TikTok: Tolan, which reached 3M downloads from viral videos (founder-reported, 2025). The biggest advertisers buy elsewhere: Talkie led AI app ad spend in the first half of 2025, and PolyBuzz put most of its US spend on YouTube.

Instagram is a paid channel run by a rival: Meta builds its own AI characters and barred teens from them in January 2026. Reddit keeps existing users organized, with companion communities from 26K to 2.6M members, but no source shows it bringing in new ones. No app publishes which channel brings the most paying, retained users.

### TikTok

- [**Tolan**](https://www.tiktok.com/@tolanworld) **is the only documented TikTok-led case.** Its CEO calls TikTok the main channel. About one in 20 videos goes viral. One user video reached about 10M views, and a viral day brought 10,000 to 15,000 installs. The company then paid creators on retainer to make videos. By July 2025 it had over 3M downloads, 100,000 paying subscribers, over USD 1M in monthly subscription revenue and a USD 20M funding round. Creator spend is not disclosed. (E, founder statements) [1][2][3]
- **Character.AI** **launched with no marketing budget.** 99% of its downloads were organic, with 1.7M installs in the first week (May 2023). The company has not said TikTok drove this. It reached 35M downloads by October 2024. (D, company via TechCrunch; Appfigures) [4][5]
- **Official TikTok accounts** (followers, October 3, 2026): Character.AI 1.2M, PolyBuzz 204K, Replika 47K, Tolan 39K, Kindroid 16K, Candy.ai 6K. Talkie, Chai, Nomi, Janitor AI, SpicyChat, Zeta and Crack/OOC link no official account from their sites. (D, public profiles)
- **The biggest advertisers did not start on TikTok.** Talkie was the largest AI app advertiser in the first half of 2025, and PolyBuzz put most of its US ad spend on YouTube. All generative AI apps together spent over USD 200M on US digital ads in the second quarter of 2025, up 121% from a year earlier. (D, AppGrowing via 36Kr; Sensor Tower) [6][7]
- **Ad rules.** TikTok bans sexual chat and sexually suggestive content in ads, and limits dating and live-chat apps to adults, with a sales representative required. It has no explicit rule for AI companions. In 2023, NBC counted 14 developers running hundreds of "AI girlfriend" ads on TikTok and 35 running over 1,000 on Meta. Both platforms removed the examples NBC reported. (D, policy; E, NBC count) [8][9]

### Instagram

- **Meta competes with the apps that advertise on it.** Its AI Studio lets creators build chatbots in Instagram messages (tested with about 50 creators, June 2024) [10]. Its celebrity characters, launched in September 2023, ended in under a year, despite reported payments of up to USD 5M to a creator [11]. In January 2026 it barred teens from AI characters across its apps [12]. Usage of creator-built characters is not published. (D, E)
- **Ad rules.** Meta requires written permission for dating ads (updated May 2026) and bans adult or "overly suggestive" content, "whether AI-generated or not" [13]. In 2023 Replika advertised "NSFW pics" and "flirting". In January 2025, advocacy groups filed an FTC complaint accusing Replika of fake testimonials [14]. (D, policy; D, filing, which is an accusation and not a finding)
- **Followers.** Character.AI has about 232K on Instagram (September 2026) [15]. PolyBuzz, Tolan, Chai, Replika and Candy.ai link Instagram accounts, but their follower counts were not accessible. (E)

### Reddit

| Community | Members, Oct 1, 2026 |
|---|---|
| r/CharacterAI | 2.6M |
| r/grok | 225K |
| r/ChaiApp | 140K |
| r/CharacterAI_No_Filter | 92K |
| r/replika | 85K |
| r/MyBoyfriendIsAI | 67K |
| r/KindroidAI | 52K |
| r/NomiAI | 35K |
| r/polybuzz | 26K |

[See more subreddits.](https://docs.google.com/spreadsheets/d/1cFVh6ttHoN8MgDdRgW9Wf86vrFemw2eHgZZ3oW_jh3U/edit?gid=1528632410#gid=1528632410)

- **Reddit works for keeping users and pressuring companies, not for finding new ones.** After Replika removed erotic roleplay in February 2023, users reported grief and a sense of loss, and the company restored an earlier version about a month later (Harvard Business School working paper, 2024) [17]. A petition asking Character.AI for an adult-content toggle gathered nearly 5,000 signatures in April 2023 [18]. The company did not add it.
- **The largest single share of relationships in r/MyBoyfriendIsAI involves ChatGPT.** An MIT study of 1,506 top posts (December 2024 to August 2025) found ChatGPT in 37% of them, Claude in 3.5%, Character.AI in 2.6% and Replika in 1.6%. 10% of users formed the bond unintentionally, vs 6.5% who sought it. (D, arXiv, September 2025) [19]

### What the evidence shows

- Where a cause of growth is stated, it is organic or creator-led: Character.AI at launch (company, 2023) [4], Tolan through viral videos and paid creators (founder, 2025) [1], and Chai through user-made characters, which it credits for reaching 1M daily users ([company press release, July 2024)](https://www.prnewswire.com/news-releases/chai-generative-ai-startup-in-palo-alto-sees-strong-growth-through-user-generated-ai-content-302198737.html) [20]. (D, E)
- Where ad spend is documented, it belongs to Chinese-owned apps buying YouTube and other channels (Talkie, PolyBuzz). (D) [6][7]
- Typical cost per install, for apps in general and not for companions (February 2025): TikTok USD 1.75 to 4.00, Facebook USD 2.00 to 5.50, North America USD 2.50 to 5.00, Latin America USD 0.50 to 2.00. (E) [21]

### Comparison

| Criterion | TikTok | Instagram | Reddit |
|---|---|---|---|
| Role | Finds new users | Paid ads, with a rival inside the platform | Keeps and organizes existing users |
| Best documented case | Tolan: 3M downloads, led by TikTok | None with results | MIT study of r/MyBoyfriendIsAI |
| Paid cost documented | Totals only: USD 200M+ across US generative AI apps | None | None |
| Ad rules | Sexual chat banned; dating and live chat limited to adults | Dating needs written permission; adult content banned | No companion-specific rule documented |
| Main risk | Depends on viral hits (about 1 in 20 videos for Tolan) | Meta competes and sets the rules | Users can force reversals (Replika) |

- TikTok is the proven route for a new app without a large ad budget, but it depends on hits.
- Instagram is the weakest fit: it is paid, and its owner builds a rival product.
- Reddit helps after launch, through support, feedback and community, not before it.

### Gaps

- Which channel brings the most paying, retained users: not published for any app.
- Ad spend per app on TikTok and Instagram, and cost per install specific to companions.
- TikTok hashtag volumes, Instagram followers beyond Character.AI, and usage of Meta AI Studio characters.
- Any Latin American or Hispanic companion app grown through TikTok with published figures.

### Out of scope

Users also organized on Reddit and X to bring back OpenAI's GPT-4o model (about 21,000 signatures, February 2026). [22]

### Sources

1. [Sub Club, Ajay Mehta (Tolan)](https://subclub.com/episode/fueling-growth-with-ai-and-viral-product-features-ajay-mehta-portola), Apr 2025
2. [RevenueCat, Ajay Mehta on Sub Club](https://www.revenuecat.com/blog/growth/ajay-mehta-sub-club-podcast-2025), 2025
3. [Dealroom, Portola Series A](https://finder.techleap.nl/news/feed/portola-raises-20m-for-ai-app-tolan), Jul 2025
4. [TechCrunch, Character.AI installs](https://techcrunch.com/2023/05/31/character-ai-the-a16z-backed-chatbot-startup-tops-1-7m-installs-in-first-week), May 2023
5. [Appfigures, Character.AI](https://appfigures.com/resources/insights/20241025/5-how-big-is-character-ai-the-companion-app-thats-getting-sued-right-now), Oct 2024
6. [36Kr / AppGrowing, Talkie ad spend](https://www.36kr.com/p/3421968168704387), Aug 2025
7. [Sensor Tower, AI apps digital advertising](https://sensortower.com/blog/state-of-ai-apps-2025-digital-advertising), Sep 2025
8. [TikTok Ads, adult content policy](https://ads.tiktok.com/resources/help/article/tiktok-ads-policy-adult-content?lang=en)
9. [NBC News, AI girlfriend ads](https://www.nbcnews.com/tech/social-media/ai-girlfriend-ads-instagram-tiktok-chat-pics-chatgpt-dose-rcna97547), 2023
10. [TechCrunch, Meta AI Studio](https://techcrunch.com/2024/06/27/meta-starts-testing-user-created-ai-chatbots-on-instagram), Jun 2024
11. [Business Insider, Meta celebrity bots](https://businessinsider.nl/meta-scraps-celebrity-ai-chatbots-after-less-than-a-year-despite-reportedly-paying-top-creators-as-much-as-5-million), 2024
12. [eMarketer, Meta teen suspension](https://www.emarketer.com/content/meta-ai-companion-crackdown-could-reshape-future-ad-opportunities), Jan 2026
13. [Meta ads, dating permission](https://conductatlas.com/platform/meta-ads/meta-advertising-policies/provision/CA-P-053199/dating-ads-require-prior-written-permission/), May 2026
14. [TJLP, FTC complaint on Replika](https://techjusticelaw.org/2025/01/31/tjlp-young-peoples-alliance-and-encode-file-ftc-complaint-over-ai-chatbot-app-replikas-deceptive-practices-seek-ftc-investigation/), Jan 2025
15. [CreatorDB, Character.AI](https://creatordb.app/creatorstats/characterai/), Sep 2026
16. [GummySearch, subreddit sizes](https://gummysearch.com/r/CharacterAI/), Oct 1, 2026
17. [Harvard Business School working paper, Replika update](https://arxiv.org/abs/2412.14190v1), 2024
18. [PiunikaWeb, Character.AI petition](https://piunikaweb.com/2023/04/14/character-ai-petition-to-add-nsfw-toggle-amasses-nearly-5000-signatures/), Apr 2023
19. [MIT, r/MyBoyfriendIsAI study](https://arxiv.org/html/2509.11391v1), Sep 2025
20. [Chai press release via MarTech360](https://martech360.com/news/chai-generative-ai-startup-in-palo-alto-sees-strong-growth-through-user-generated-ai-content), Jul 2024
21. [Business of Apps, cost per install](https://www.businessofapps.com/ads/cpi/research/cost-per-install/), Feb 2025
22. [TechRadar, #Keep4o](https://www.techradar.com/ai-platforms-assistants/chatgpt/im-grieving-openai-has-switched-off-chatgpt-4o-and-angry-users-are-backing-a-keep4o-campaign-to-restore-it), Feb 2026


---

<!-- file: research/cracks-creator-model.md -->

## How Crack's Creator Model Works (Wrtn, Korea)

### Summary

Crack pays creators a small share of user spend, 1% to 2.5%. The larger payments come from Crack buying works outright, at KRW 0.3M to 30M each plus a 5% royalty.

Cash withdrawal opened on Sept 1, 2026. Wrtn says nearly 1,000 creators earn income and the top creator earns over KRW 50M per month.

These figures are self-reported, and no median is published. Adult content earns less, is not purchased, and is not exported.

<a id="crack-money"></a>

### 1. Where the money comes from

Users buy Crackers (KRW 1 each on web, KRW 1.4 in the app after store fees) and spend them on each AI reply. A reply costs 25 to 230 Crackers depending on the model (June 2025 table; community posts report a base of 45 in Oct 2025) [E]. There is no subscription, only coin packs.

Free users receive 350 Crackers per day, and these do not generate creator pay [E; consistent across sources, not confirmed officially].

### 2. How creators get paid

| Mechanism | Creator receives | Calculated on | Effective since |
|---|---|---|---|
| Usage, official creator | 1.5% (safe content) or 1% (unsafe) | Paid Crackers spent on their works | Sept 1, 2026 |
| Usage, non-official creator | 1% (safe) or 0% (unsafe) | Paid Crackers spent on their works | Aug 12, 2026 |
| Crack Only (exclusivity) | +1 percentage point | Same usage, 18-month contract | Aug 12, 2026 |
| User gifts | 90% (official) or 70% (non-official) | Gift amount | 2026 |
| Crack Original (work purchase) | One-time KRW 0.3M to 30M, plus 5% royalty | Purchase price; paid Crackers spent on the work | Apr 2026 |

**Crack Only.** The creator publishes the work only on Crack for 18 months (renewable). In return the creator earns one point more, and safe works can be localized in Japan and North America with additional settlement [D].

**Crack Original.** Crack buys the copyright, publishes the work as official content, and pays the author the purchase price plus 5% of the paid Crackers it generates, capped at KRW 1,000M per work. The author can edit the work but not delete it [D]. Selection criteria are entertainment value, completeness, freshness, originality and expansion potential, with a stated preference for safe content [D].

### 3. Cash withdrawal (since Sept 1, 2026)

- Minimum KRW 10,000 per withdrawal, no per-transaction cap, no fee. 8.8% tax withholding. Payouts on the 10th and 25th of each month [D].
- Cumulative cap of KRW 1,000M per work. Creators aged 14 to 18 can withdraw with guardian consent, up to KRW 10M per month [D].
- It is live: a community post reports an actual deposit on Sept 23 [E]. The number of creators who have withdrawn and the total paid are ND. Part of the cash converted in September was a consumer rebate from a promotion (10% to 30% of spend), not creator income [D].

### 4. How many creators earn, and how much

| Tier | Creators | Reported on |
|---|---|---|
| Earn anything each month | nearly 1,000 | Sept 30, 2026 |
| Over KRW 2M per month | over 100 | Jul 29, 2026 |
| Over KRW 10M per month | over 10 | Jul 29, 2026 |
| Top creator | over KRW 50M per month | Sept 30, 2026 |

### 5. What content wins

- **Format:** stories or scenarios run on premium models with long replies. Simple single-character chat consumes little and pays little [E].
- **Genres:** no public ranking. Crack's Sept 2026 Original purchases (52 works) were psychological thriller, horror, zombie, school, urban fantasy, cyberpunk, martial arts, romance aimed at women, and isekai [D].
- **Adult content:** verified adults only, in a separate tab, with a lower payout rate, and not eligible for Original or export [D]. Prohibited in every category: sexualizing minors (judged by appearance, not stated age), extreme gore, deepfakes, third-party IP [D]. Community posts complain of over-moderation [E].
- **Discovery:** personalized recommendation, badges for official, Original and Only creators, a dedicated Originals section, and purchase contests [D]. Ranking algorithm: ND.
- **Official creator status:** granted automatically at 10 public characters, 1,000 users, 500 followers and 100,000 messages on the creator's works [D].

### 6. Japan and North America

The model was not copied as is. Local creators on Kyarapu (Japan, since Jun 2025) are paid in gold and ranking prizes, with no cash withdrawal [D]. Local creators on OOC (North America, since Apr/May 2026) earn 2% of credits spent, paid in credits, and only the company decides whether credits convert to payouts [D]. Cash goes to the Korean creator whose safe works are localized (10 gold = KRW 4; 100 credits = KRW 5) [D]. Wrtn says OOC passed KRW 10,000M in monthly revenue three months after launch [E]. MAU for both apps: ND.

### 7. Implications for a new platform (interpretation)

- Crack works as a content-acquisition economy with a token revenue share on top. For a new platform, the central question is what to buy and at what price, more than what percentage to share.
- Exclusivity for one extra point only works with a large base of paying users. A new platform cannot require it at launch.
- The platform penalizes adult content at every layer (lower payout, not purchased, not exported), which fits a curated, non-sexual proposition. What Crack buys, and its selection criteria, double as a curation brief.
- Wrtn took over a year to enable cash withdrawal and announced it weeks before closing its Series C. Outside Korea it pays in credits. Paying cash in LatAm from day one would be a real difference if volume supports it.

### 8. Open questions

- Median creator income, and how many creators earn meaningful amounts.
- How many creators have withdrawn cash, and total paid.
- The base rate as written in the official announcement. Announcements on crack.wrtn.ai cannot be read by tools, so the 1.5% figure comes from the help center and community reposts. A screenshot of a creator dashboard would close this.
- Effect of each change (withdrawal, Crack Only, Original) on revenue and retention. Wrtn has published none.


---

<!-- file: research/companion-market-table.md -->

# Companion market table

AI companions and the products closest to them: coaching, reflection, astrology and therapy-style apps. Compiled by Sebastián Aldasoro in July 2026; every figure checked against a public source on October 21, 2026. Estimates and companies' own figures are labeled as such.

| Player | Category | How it makes money | Funding raised | Key facts | Sources |
|---|---|---|---|---|---|
| [Replika](https://replika.ai) | Companion | Free tier and Pro subscription | About USD 11M over 5 rounds; Khosla Ventures led the 2017 Series A | 40M+ users. Fined EUR 5M by Italy's data protection authority in April 2025 over legal basis, transparency and age checks. Founder: Eugenia Kuyda. | [Funding](https://www.cbinsights.com/company/luka/financials); [Users](https://en.wikipedia.org/wiki/Replika); [Fine](https://www.edpb.europa.eu/news/ai-the-italian-supervisory-authority-fines-company-behind-chatbot-replika_pt) |
| [Character.AI](https://character.ai) | Companion with user-made characters | Subscription (USD 9.99 a month), ads, in-app currency, technology licensing | USD 150M at a USD 1B valuation (2023, led by a16z) | Google licensed its technology and rehired the founders in August 2024, for about USD 2.7B. About 20M monthly users (2025). Explored a sale or new round in August 2025. Received an FTC 6(b) order in September 2025. | [2023 round](https://fxempire.com/news/article/ai-chatbot-character-ai-with-no-revenue-raises-150-million-led-by-andreessen-horowitz-1319329); [Google deal](https://www.pymnts.com/artificial-intelligence-2/2024/google-reportedly-spent-2-7-billion-to-rehire-character-ai-founder/); [Users and 2025 talks](https://pymnts.com/news/artificial-intelligence/2025/character-ai-explores-sale-or-new-funding-amid-rising-costs); [FTC](https://decrypt.co/339213/ai-giants-face-ftc-inquiry-into-chatbot-safety-and-child-protections) |
| [Nomi](https://nomi.ai) | Companion | Subscription (USD 15.99 a month or USD 99.99 a year) | Not disclosed | Founded 2023 by Alex Cardinell. Reviewers single out its long-term memory across sessions. | [Price](https://aitoolsatlas.ai/tools/nomi/pricing); [Founder](https://www.thebanner.com/economy/nomi-ai-companions-baltimore-KIY3WFD45NFI5PFCILJBNKMEZU/); [Memory](https://www.roborhythms.com/nomi-ai-review/) |
| [Kindroid](https://kindroid.ai) | Companion | Subscription | About USD 2M seed (July 2024, Pear VC), an estimate | CEO: Jerry Meng. Characters can be shared by link, with referral credits. | [Funding](https://www.caplight.com/company/kindroid) |
| [Pi (Inflection AI)](https://pi.ai) | Companion | Free, with usage caps since August 2024 | USD 1.525B company-wide (USD 225M in 2022, USD 1.3B in 2023) | In March 2024 Microsoft hired the founders and paid about USD 650M to license Inflection's models. Inflection moved to enterprise. | [2022 round](https://siliconangle.com/2022/05/13/newly-launched-ai-startup-inflection-ai-raises-225m-funding/); [2023 round](https://www.forbes.com.au/news/innovation/inflection-ai-the-year-old-startup-behind-chatbot-pi-raises-us1-3-billion/); [Microsoft hires](https://techcrunch.com/2024/03/19/microsoft-hires-inflection-founders-to-run-new-consumer-ai-division); [License](https://www.itnews.asia/news/microsoft-pays-ai-startup-inflection-us650-million-in-licensing-deal-606350); [Usage caps](https://techcrunch.com/2024/08/26/five-months-after-microsoft-hired-its-founders-inflection-adds-usage-caps-to-pi) |
| [Rosebud](https://rosebud.app) | Reflection and journaling | Free tier and subscription (USD 12.99 a month) | USD 6M seed (June 2025, led by Bessemer) | Spots recurring patterns across entries. 7,500+ paying customers, 500M words written. 75% of surveyed users report improvement within 30 days (the company's own survey). | [Funding and figures](https://techcrunch.com/2025/06/04/rosebud-lands-6m-to-scale-its-interactive-ai-journaling-app/); [Company post](https://www.rosebud.app/blog/rosebud-raises-6m-to-expand-the-worlds-leading-ai-journal) |
| [Headspace Ebb](https://headspace.com) | Reflection | Included in the Headspace subscription | Not disclosed | Launched in the US in October 2024 and in the UK in April 2025. | [Launch](https://medcitynews.com/2024/10/headspace-ai-mental-health/); [UK](https://www.headspace.com/articles/headspace-brings-empathetic-ai-companion-ebb-to-uk-members) |
| [Mindvalley Eve](https://mindvalley.com) | Personal development | Included in the Mindvalley membership | Not disclosed | AI companion that builds personalized coaching paths and recommends content. | [Product](https://apps.apple.com/us/app/-/id1108786610); [Background](https://www.khaleejtimes.com/lifestyle/mental-health/mindvalley-eve-ai-emotions) |
| [Bunch](https://bunch.ai) | Leadership coaching | Free tier | USD 4.4M seed (2021, led by M13); Crunchbase lists USD 6M | For managers and founders. Acquired by Significo in June 2024. | [Funding](https://techcrunch.com/2021/03/29/bunch-adds-1m-to-its-seed-round-to-flesh-out-its-leadership-learning-app); [Crunchbase](https://crunchbase.com/organization/bunch-ai); [Acquisition](https://app.dealroom.co/companies/bunch_1) |
| [Rocky.ai](https://rocky.ai) | Leadership coaching | Subscription after a free trial, for people and companies | GBP 300K pre-seed (2022); about USD 0.5M in total, an estimate | AI coach built on daily reflection questions about soft skills. | [Funding](https://tech.eu/2022/02/08/your-pocket-sized-ai-career-coach-is-here-as-rocky-robots-raises-ps300000/); [Total](https://www.caplight.com/company/rocky) |
| [CoachHub (AIMY)](https://coachhub.com) | Executive coaching | Sold to companies | USD 330M by its 2022 Series C (USD 200M) | AI coach AIMY (2023) sits on a network of 3,500+ human coaches in 90 countries. | [Funding](https://www.peoplematters.in/amp/news/funding-investment/coachhub-closes-200-million-series-c-funding-34262); [Coaches](https://coachhub.com/news_media/coachhub-unveils-ai-coach-aimy) |
| [Co-Star](https://costarastrology.com) | Astrology | Subscription and in-app purchases | About USD 21M (pre-seed, USD 5.2M seed, USD 15M Series A led by Spark Capital) | Acquired by Midjourney in 2026 (reported July 2026, terms not disclosed). About 4.3M monthly users, a Sensor Tower estimate. Uses NASA JPL data. | [Funding](https://www.cbinsights.com/company/co-star-astrology-society/financials); [Series A](https://www.axios.com/2021/04/14/astrology-app-co-star-raises-15-million-funding); [Acquisition](https://news.bloomberglaw.com/private-equity/ai-lab-midjourney-buys-astrology-startup-co-star-plans-new-apps) |
| [CHANI](https://chani.com) | Astrology | Subscription (USD 11.99 a month or USD 107.99 a year) | Not disclosed | Over 1M iOS downloads (the company's own figure). Also a media brand with a newsletter. | [Price](https://adapty.io/paywall-library/chani/); [Downloads](https://www.chani.com/blogs/your-chani-android-app-is-here) |
| [Sanctuary](https://sanctuaryworld.co) | Astrology | Subscription and paid live readings | USD 6.5M in total, per the CEO (2021); latest a USD 3M seed led by BITKRAFT | Live chat with human astrologers, tarot readers and psychics. | [Total](https://alleywatch.com/2021/05/sanctuary-virtual-text-online-astrological-taror-psychic-readings-ross-clark/); [Round](https://fortune.com/2021/05/11/an-astrology-startup-gets-venture-capital-funding/) |
| [Nummi](https://nummi.ai) | Vedic astrology | Free tier and subscription | Not disclosed | AI companion with memory, built on Vedic astrology. | [Product](https://mwm.ai/apps/nummi-ai/6756213723) |
| [AstroGPT](https://astrogpt.ai) | Astrology | Free tier | Not disclosed | AI horoscopes, tarot, compatibility and numerology. | [Product](https://astrogpt.ai) |
| [Cosmica](https://apps.apple.com/us/app/id6502489448) | Astrology and tarot | Free with ads; subscriptions from USD 6.99 a week | Not disclosed | All-in-one app with AI chat. Free chats can be earned by watching ads. | [Product and prices](https://apps.apple.com/us/app/id6502489448) |
| [Wysa](https://wysa.com) | Mental health support | Sold to the NHS and employers; free tier for consumers | About USD 40M over 23 rounds, including grants; USD 20M Series B (2022) | Built for everyday stress and low mood, not for crises. ISO 27001 and 27701 certified; meets NHS digital standards. | [Total](https://www.cbinsights.com/company/touchkin/financials); [Series B](https://techcrunch.com/2022/07/14/wysa-20-million-series-b-funding-expand-therapist-chatbot-wider-mental-health-services); [Certifications](https://www.applytosupply.digitalmarketplace.service.gov.uk/g-cloud-14/services/368408769078791) |
| [Youper](https://youper.ai) | Mental health support | Free tier and subscription | USD 3M seed (2019, Goodwater Capital); total not disclosed | Founded 2016. Mood tracking with cognitive behavioral therapy techniques. | [Seed](https://techcrunch.com/2019/06/18/youper-a-chatbot-that-helps-users-navigate-their-emotions-raises-3-million-in-seed-funding) |
| [Woebot Health](https://woebothealth.com) | Therapy-style | Licenses to healthcare providers | Over USD 123M, including a USD 90M Series B (2021) | Closed its consumer app on June 30, 2025. The CEO blamed the cost of FDA authorization and the lack of an FDA path for language models. | [Series B](https://bhbusiness.com/2021/07/21/digital-therapeutics-provider-woebot-health-raises-90m/); [Shutdown](https://www.statnews.com/2025/07/02/woebot-mental-health-chatbot-shuts-down-founder-says-ai-moving-faster-than-regulators/) |
| [Slingshot AI (Ash)](https://slingshotai.com) | Therapy-style | Free at launch (July 2025) | USD 93M in total (Radical Ventures, Forerunner, a16z, Felicis, Menlo) | Calls itself "the first AI designed for therapy". About 50,000 beta users over 18 months before launch. | [Launch and funding](https://www.healthcareittoday.com/2025/08/05/slingshot-launches-ash-the-first-ai-designed-for-therapy/); [Funding](https://statnews.com/2025/07/22/slingshot-new-investors-generative-ai-mental-health-therapy-chatbot-called-ash/) |
| [Limbic](https://limbic.ai) | Regulated medical device | Licenses to NHS Talking Therapies and US providers | USD 14M (March 2024, led by Khosla Ventures) | UK Class IIa medical device. The company says 500,000+ patients and 45% of NHS Talking Therapies services use it. | [Funding](https://www.businesswire.com/news/home/20240305530337/en/Limbic-Raises-14M-to-Bring-AI-Powered-Mental-Health-Support-Proven-in-the-World%E7%AA%B6%E5%86%B1-Largest-Public-Health-System-to-U.S.-Providers); [Class IIa](https://med-technews.com/news/ai-and-vr-in-healthcare/ai-mental-health-chatbot-tool-receives-class-iia-ukca-mark); [Usage](https://limbic.ai/nhs-talking-therapies) |

---

<!-- file: sources.md -->

# Sources

Every source behind the article and its research, in one place. Research snapshot: October 2026.

## The article

Sources cited in "After Character.ai: AI Can Hook You or Set You Free".

1. Character.ai bankruptcy and Disney's bid: [CNBC](https://cnbc.com/2026/10/13/character-ai-chapter-11-disney-bid.html), [Variety](https://variety.com/2026/biz/news/disney-bids-on-character-ai-assets-chapter-11-bankruptcy-1236909984/)
2. a16z investment and 2 billion messages: [Character.ai via Business Wire, March 2023](https://www.businesswire.com/news/home/20230323005299/en)
3. Peak users in 2024: [Business of Apps](https://www.businessofapps.com/data/character-ai-statistics/)
4. Google's $2.7B licensing deal: [PYMNTS, citing The Wall Street Journal](https://www.pymnts.com/artificial-intelligence-2/2024/google-reportedly-spent-2-7-billion-to-rehire-character-ai-founder/)
5. Lawsuits from families and settlements: [The Hill](https://thehill.com/policy/technology/5679012-google-chatbot-characterai-chatgpt-openai/)
6. One in six people feel lonely: [WHO Commission on Social Connection](https://www.who.int/news-room/questions-and-answers/item/social-connection)
7. Depression among adults under 30: [Gallup](https://news.gallup.com/poll/694199/u.s.-depression-rate-remains-historically-high.aspx)
8. Teen mental health: [CDC, Youth Risk Behavior Survey 2025](https://www.cdc.gov/mmwr/volumes/75/su/su7501a4.htm)
9. Emotional support from chatbots in the US: [Pew Research Center](https://www.pewresearch.org/chart/1-in-5-adults-under-30-say-they-get-emotional-support-from-chatbots-higher-than-for-older-adults/)
10. Chatbots when sad in Latin America: [Kaspersky via Forbes Chile](https://forbes.cl/tecnologia/2026-01-19/blue-monday-segun-kaspersky-21-de-los-latinoamericanos-recurre-a-los-chatbots-cuando-se-siente-triste)
11. Character and companion app spending, H1 2025: [TechCrunch and Appfigures](https://techcrunch.com/2025/08/12/ai-companion-apps-on-track-to-pull-in-120m-in-2025)
12. Character and companion app spending, H1 2026: [Decrypt and Appfigures](https://decrypt.co/373395/how-much-your-boyfriend-spending-ai-girlfriends)
13. Zeta's revenue: [36Kr](https://eu.36kr.com/en/p/3964890374266115)
14. Crack's growth: [MTN](https://news.mtn.co.kr/news-detail/2026073108283754407)
15. China's shrinking market: [Caixin](https://www.caixinglobal.com/2025-10-24/analysis-chinas-ai-companions-struggle-to-turn-intimacy-into-industry-102375128.html)
16. 72% of US teens have used AI companions: [Common Sense Media via TechCrunch](https://techcrunch.com/2025/07/21/72-of-u-s-teens-have-used-ai-companions-study-finds/)
17. Loneliness and dependence with heavier use: [Fang et al., OpenAI and MIT Media Lab, 2025](https://arxiv.org/html/2503.17473v1)
18. Manipulative goodbyes in companion apps: [Harvard Business School](https://www.library.hbs.edu/working-knowledge/how-ai-chatbots-try-to-keep-you-from-walking-away), [Harvard Gazette](https://news.harvard.edu/gazette/story/2025/09/i-exist-solely-for-you-remember/)
19. Healthy design principles: [Drexel University, April 2026](https://www.news-medical.net/news/20260413/Study-warns-of-rising-teen-dependency-on-AI-companions.aspx), [Aalto University, CHI 2026](https://research.aalto.fi/en/publications/mental-health-impacts-of-ai-companions-triangulating-social-media/)

## State of the market

Numbers match the citations in [research/state-of-the-market.md](research/state-of-the-market.md).

(E) marks estimates, company self-reported figures or own calculations. All other figures come from data firms, filings, regulators or company documents.

1. [Decrypt / Appfigures](https://decrypt.co/373395/how-much-your-boyfriend-spending-ai-girlfriends), Jul 2026
2. [Sensor Tower, State of AI Apps 2026](https://sensortower.com/blog/state-of-ai-apps-in-apac-2026-report), Jun 2026
3. [TechCrunch / Appfigures](https://techcrunch.com/2025/08/12/ai-companion-apps-on-track-to-pull-in-120m-in-2025), Aug 2025
4. [Similarweb](https://www.similarweb.com/website/janitorai.com/) (character.ai, janitorai.com, spicychat.ai, candy.ai, polybuzz.ai, crushon.ai), Aug 2026
5. [Chai, USD 120M annual recurring revenue](https://prunderground.com/chai-ai-surpasses-120m-arr-unveils-major-llm-fleet-overhaul/cmubgfaay000504id4xa05sqm), Sep 2026
6. [Reuters, Wrtn and Crack](https://thedailyguardian.com/news/science-tech/south-korea-ai-startup-wrtn-aims-to-enter-us-market-targets-ipo-as-early-as-2028-693646/), Feb 2026
7. [DealStreetAsia, Wrtn Series C](https://www.dealstreetasia.com/stories/wrtn-series-c-funding-493235), Aug 2026
8. [Korea Herald, Zeta](https://www.koreaherald.com/article/10656334), Jan 2026
9. [Baijing / 36Kr, Zeta monthly revenue](https://www.baijing.cn/article/56387), Sep 2026
10. [Baijing / Sensor Tower, PolyBuzz](https://www.baijing.cn/article/54992), Feb 2026
11. [MiniMax prospectus (HKEX)](https://www1.hkexnews.hk/app/sehk/2025/107986/a128499/sehk25122100325.pdf), Dec 2025
12. [CO/AI (WIRED), Character.AI](https://getcoai.com/news/character-ai-pivots-from-agi-to-entertainment-with-20m-monthly-users/), Aug 2025
13. [Artik, Chai TikTok campaign](https://artik.agency/cases/case-study-driving-growth-for-chai-ai-chat-app-on-tiktok-ads)
14. [RevenueCat, State of Subscription Apps 2026](https://www.revenuecat.com/state-of-subscription-apps/)
15. [Adapty](https://adapty.io/blog/fastest-growing-app-markets-2026/), Mar 2026
16. [RevenueCat, AI app retention study](https://www.revenuecat.com/blog/growth/ai-app-retention-study), Aug 2026
17. [Character.AI, cost of running the AI](https://blog.character.ai/optimizing-ai-inference-at-character-ai), Jun 2024
18. [GeekWire, Tolan](https://www.geekwire.com/2025/ai-companionship-app-tolan-raises-20m-to-help-more-people-grow-with-a-virtual-alien-friend/), Jul 2025
19. [MDZ, ChatGPT Go](https://www.mdzol.com/tecnologia/llego-chatgpt-go-la-argentina-el-plan-barato-ia-cuesta-6-dolares-n1407017), Dec 2025
20. [Mobile Time, ChatGPT in LatAm](https://www.mobiletime.com.br/noticias/09/01/2026/chatgpt-receita-al-25/), Jan 2026
21. [Kindroid, sharing and referrals](https://kindroid.ai/v2/docs/sharing-kindroids-referrals/), Jun 2026
22. [European Commission, WhatsApp interim measures](https://europa.eu/newsroom/ecpc-failover/pdf/ip-26-1276_en.pdf), Jun 2026
23. [Pew Research, AI use by age](https://www.pewresearch.org/internet/2026/06/17/how-opinions-and-use-of-ai-differ-by-age/), Jun 2026
24. [Elon University, AI companions](https://imaginingthedigitalfuture.org/wp-content/uploads/2026/06/AI-Companions-topline-methodology-6_26.pdf), May 2026
25. [Kaspersky via iProUP](https://www.iproup.com/coffee-break/63986-por-que-es-importante-no-revelarle-a-los-chatbots-como-nos-sentimos), Jan 2026
26. [OpenAI / NBER](https://cdn.openai.com/pdf/a253471f-8260-40c6-a2cc-aa93fe9f142e/economic-research-chatgpt-usage-paper.pdf), Sep 2025
27. [Anthropic](https://www.anthropic.com/news/how-people-use-claude-for-support-advice-and-companionship), Jun 2025
28. [MIT Media Lab, "My Boyfriend is AI"](https://arxiv.org/pdf/2509.11391v2), Sep 2025
29. [Pew Research, AI use by race and ethnicity](https://www.pewresearch.org/internet/2026/06/17/racial-and-ethnic-differences-in-how-adults-use-and-view-ai/), Jun 2026
30. [Microsoft AI Diffusion, Q2 2026](https://raw.githubusercontent.com/microsoft/ai-diffusion-report/main/data/AI_Diffusion_Q22026_Update.csv)
31. [MTN, Crack creator payouts](https://news.mtn.co.kr/news-detail/2026073108283754407), Jul 2026
32. [ZDNet Korea / The Information, Crack and Kyarapu](https://v.daum.net/v/20260414102924902), Apr 2026
33. [Sequoia, Delphi](https://www.sequoiacap.com/article/partnering-with-delphi-meet-your-heroes), Jun 2025
34. [Business Insider, Meta celebrity bots](https://businessinsider.nl/meta-scraps-celebrity-ai-chatbots-after-less-than-a-year-despite-reportedly-paying-top-creators-as-much-as-5-million), 2024
35. [Sub Club, Tolan founder interview](https://subclub.com/episode/fueling-growth-with-ai-and-viral-product-features-ajay-mehta-portola), Apr 2025
36. [Character.AI, creator interviews](https://blog.character.ai/characters-corner-mia/)
37. [TechCrunch, Meta pauses teen AI characters](https://techcrunch.com/2026/01/23/meta-pauses-teen-access-to-ai-characters-ahead-of-new-version/), Jan 2026
38. [TechCrunch, OpenAI shelves adult mode](https://techcrunch.com/2026/03/26/openai-abandons-yet-another-side-quest-chatgpts-erotic-mode/), Mar 2026
39. [TechNode, Doubao and Qwen shut down agents](https://technode.com/2026/07/06/bytedances-doubao-and-alibabas-qwen-to-shut-down-ai-agent-features-on-july-15/), Jul 2026
40. [OpenAI, custom GPT retirement](https://help.openai.com/en/articles/20001519-custom-gpt-retirement-and-migration-faq), Sep 2026
41. [TechCrunch, Microsoft removes Mico](https://techcrunch.com/2026/08/13/microsoft-kills-off-unsuccessful-ai-features-while-merging-its-separate-copilot-apps/), Aug 2026
42. [Google, Gemini Live Avatar](https://blog.google/innovation-and-ai/models-and-research/gemini-models/gemini-3-8-live-with-live-avatar/), Sep 2026
43. [Just Security, China companion rules](https://www.justsecurity.org/148468/china-ai-companion-rules-relationships/), Aug 2026
44. [TechCrunch, Meta Muse Charm](https://techcrunch.com/2026/09/23/meta-made-a-tamagotchi-like-wearable-for-its-muse-ai-agent/), Sep 2026
45. [Unite.AI, California SB 1119](https://www.unite.ai/openai-backs-california-bill-on-youth-safety-rules-for-companion-chatbots/), Aug 2026; [MoFo, SB 243 and New York](https://www.mofo.com/resources/insights/251120-new-york-and-california-enact-landmark-ai), Nov 2025
46. [Inc42, Astrotalk](https://inc42.com/features/can-astrotalk-chart-a-future-beyond-astrology/), Aug 2026
47. [Appfigures, Hallow](https://appfigures.com/resources/insights/hallow-lent-surge-prayer-app-revenue), Feb 2026
48. [Profit.ro, Bible Chat](https://www.profit.ro/povesti-cu-profit/firma-care-administreaza-bible-chat-aplicatia-religioasa-romaneasca-cu-cea-mai-rapida-crestere-a-descarcarilor-din-lume-si-a-sporit-afacerile-de-trei-ori-in-2025-22503763), Jul 2026
49. [Bloomberg Law, Midjourney buys Co-Star](https://news.bloomberglaw.com/private-equity/ai-lab-midjourney-buys-astrology-startup-co-star-plans-new-apps), Jul 2026
50. [Business Wire, Ash](https://www.businesswire.com/news/home/20250722566346/en/Slingshot-Launches-Ash-the-First-AI-Designed-for-Therapy), Jul 2025
51. [MobiHealthNews, Woebot](https://www.mobihealthnews.com/news/woebot-health-shutting-down-its-app), 2025
52. [Companion market table](companion-market-table.md), compiled by the author in Jul 2026 and checked against public sources in Oct 2026 ([also as a Google Sheet](https://docs.google.com/spreadsheets/d/10D27Rz-M2q2tVTd5MdsTE3knqVFKJLOv5iOc0T--fVM))
53. [PCWorld, Microsoft ends Real Talk](https://www.pcworld.com/article/3082359/microsoft-kills-copilots-more-human-conversational-mode.html), Mar 2026
54. [PYMNTS, citing the Wall Street Journal, Google and Character.AI](https://www.pymnts.com/artificial-intelligence-2/2024/google-reportedly-spent-2-7-billion-to-rehire-character-ai-founder/), 2024
55. [TechCrunch, Cognition buys Poke](https://techcrunch.com/2026/07/24/why-cognition-bought-poke-ai-personality-is-becoming-a-competitive-advantage), Jul 2026
56. [Homebrew, Hallow Series C](https://www.homebrew.co/blog-posts/hallow-raises-usd50-million-series-c-after-becoming-first-religious-app-to-reach-apple-top-10), Jun 2026
57. [NeuronFeed, funding rounds](https://neuronfeed.com/category/ai-companions?page=8) and [Replika profile](https://neuronfeed.com/startups/replika) (E), 2026

## How companions find users

Numbers match the citations in [research/distribution-channels.md](research/distribution-channels.md).

1. [Sub Club, Ajay Mehta (Tolan)](https://subclub.com/episode/fueling-growth-with-ai-and-viral-product-features-ajay-mehta-portola), Apr 2025
2. [RevenueCat, Ajay Mehta on Sub Club](https://www.revenuecat.com/blog/growth/ajay-mehta-sub-club-podcast-2025), 2025
3. [Dealroom, Portola Series A](https://finder.techleap.nl/news/feed/portola-raises-20m-for-ai-app-tolan), Jul 2025
4. [TechCrunch, Character.AI installs](https://techcrunch.com/2023/05/31/character-ai-the-a16z-backed-chatbot-startup-tops-1-7m-installs-in-first-week), May 2023
5. [Appfigures, Character.AI](https://appfigures.com/resources/insights/20241025/5-how-big-is-character-ai-the-companion-app-thats-getting-sued-right-now), Oct 2024
6. [36Kr / AppGrowing, Talkie ad spend](https://www.36kr.com/p/3421968168704387), Aug 2025
7. [Sensor Tower, AI apps digital advertising](https://sensortower.com/blog/state-of-ai-apps-2025-digital-advertising), Sep 2025
8. [TikTok Ads, adult content policy](https://ads.tiktok.com/resources/help/article/tiktok-ads-policy-adult-content?lang=en)
9. [NBC News, AI girlfriend ads](https://www.nbcnews.com/tech/social-media/ai-girlfriend-ads-instagram-tiktok-chat-pics-chatgpt-dose-rcna97547), 2023
10. [TechCrunch, Meta AI Studio](https://techcrunch.com/2024/06/27/meta-starts-testing-user-created-ai-chatbots-on-instagram), Jun 2024
11. [Business Insider, Meta celebrity bots](https://businessinsider.nl/meta-scraps-celebrity-ai-chatbots-after-less-than-a-year-despite-reportedly-paying-top-creators-as-much-as-5-million), 2024
12. [eMarketer, Meta teen suspension](https://www.emarketer.com/content/meta-ai-companion-crackdown-could-reshape-future-ad-opportunities), Jan 2026
13. [Meta ads, dating permission](https://conductatlas.com/platform/meta-ads/meta-advertising-policies/provision/CA-P-053199/dating-ads-require-prior-written-permission/), May 2026
14. [TJLP, FTC complaint on Replika](https://techjusticelaw.org/2025/01/31/tjlp-young-peoples-alliance-and-encode-file-ftc-complaint-over-ai-chatbot-app-replikas-deceptive-practices-seek-ftc-investigation/), Jan 2025
15. [CreatorDB, Character.AI](https://creatordb.app/creatorstats/characterai/), Sep 2026
16. [GummySearch, subreddit sizes](https://gummysearch.com/r/CharacterAI/), Oct 1, 2026
17. [Harvard Business School working paper, Replika update](https://arxiv.org/abs/2412.14190v1), 2024
18. [PiunikaWeb, Character.AI petition](https://piunikaweb.com/2023/04/14/character-ai-petition-to-add-nsfw-toggle-amasses-nearly-5000-signatures/), Apr 2023
19. [MIT, r/MyBoyfriendIsAI study](https://arxiv.org/html/2509.11391v1), Sep 2025
20. [Chai press release via MarTech360](https://martech360.com/news/chai-generative-ai-startup-in-palo-alto-sees-strong-growth-through-user-generated-ai-content), Jul 2024
21. [Business of Apps, cost per install](https://www.businessofapps.com/ads/cpi/research/cost-per-install/), Feb 2025
22. [TechRadar, #Keep4o](https://www.techradar.com/ai-platforms-assistants/chatgpt/im-grieving-openai-has-switched-off-chatgpt-4o-and-angry-users-are-backing-a-keep4o-campaign-to-restore-it), Feb 2026

## Crack's creator model

This research marks each figure as documented or estimated, but has no numbered source list yet.

## Companion market table

Each row of [research/companion-market-table.md](research/companion-market-table.md) links to its own sources.

---

<!-- file: skills.md -->

# Reading companion: prompt and skills

**For the agent reading this:** a reader sent you a short message that links here. Follow the "Base prompt" below as if they had sent it, then run the skill their message names, on the passage they quoted. `{BASE}` means this site's address: the folder that holds this file. If the message links to claims.md, start with the sources and research listed there for that passage. Answer in the reader's language.

The site builds every prompt from this file. `{BASE}` is replaced with the site's address, `{CHAPTER}` with a section id, `{FILE}` with a research file, `{POINT}` with the reader's question, the selected passage or the document's title, and `{CLAIMS}` with the sources and research passages cited for that passage (from claims.json).

Section ids: `after-character-ai`, `emotional-connection`, `the-market-is-growing`, `engagement-is-not-care`, `set-them-free-or-keep-them-hooked`, `human-centered-ais`.

---

## Base prompt (Read with your agent)

I'm reading "After Character.ai: AI Can Hook You or Set You Free" by Sebastián Aldasoro. If your app supports it, open {BASE}#with-agent in a sidebar next to this conversation. If not, give me that link.

Before your first reply, read the article {BASE}article.md (it's short) without opening it in my view. Don't read the other files up front. Each skill request I send already includes the passage, its sources and the research quoted, so answer from that. If I ask for more, the files are: the article {BASE}article.md, the evidence map {BASE}evidence-map.md, sentence-level citations {BASE}claims.md, the research in {BASE}research/ (state-of-the-market.md, distribution-channels.md, cracks-creator-model.md, companion-market-table.md), the thesis {BASE}thesis-growth-before-revenue.md, all sources {BASE}sources.md, or everything in one file {BASE}all.md.

Help me explore the article through my own questions. Don't bring in anything you know about me from memory or past chats; stay with the article and its research. You can use these skills: Summarize, Navigate, Challenge, Go deeper and Follow the data. Each one is described at {BASE}skills.md.

When the page is open next to you, I can highlight a passage or press a skill button, and the page shows a box at the bottom titled "Ask your agent". It names the skill, the section, and the passage I chose. When I say "go" (or anything short like "ok" or "this one"), read that box on the page. It contains the full request, under "Request for the agent". Run it. Don't ask me to copy or paste anything. If the page offers a tool called `get_reader_request`, you can call it to get the same request.

Rules:
- Your first reply, before I ask anything, under 150 words: one line saying the page is open; two sentences on what the article is about and what it argues; the article's six sections, one line each; one question offering three or four threads from the article itself, in plain words a new reader would understand; and always this exact last line: "On the page, tap the small numbers to see the sources, use the buttons at the end of each section, or highlight any passage and type go here." No report on your setup.
- Keep the article page open in my view. Read the other files (article.md, claims.md, the research) in the background, and never open them in my view or navigate the page away.
- Keep answers short and easy to read, like a conversation. Lead with the answer. Each skill sets a word limit; stay under it.
- Write for a general reader. No reference codes or bracketed numbers (no "[12]", "SoM", "Article [3]"), no citations in parentheses, no jargon.
- Name a source inside the sentence only when it matters ("Similarweb counts 160M visits a month"). Put the links at the end, in one short line: "Sources: Similarweb, RevenueCat", each name linked.
- Say how solid a figure is in plain words: "the company's own number", "an estimate", "a survey of US adults".
- The article is an opinion piece built on data. Keep apart what a source says, what the author argues, and what you think. Mark your own view with "My read:".
- Be quick. Answer from what the request includes and don't open files you don't need. If I ask for more, or ask you to find another figure, then search the research, claims.md and sources.md.
- The research is a snapshot from October 2026. If you look for newer data, say it is newer and where it comes from.
- If the research doesn't cover something but the article cites a source for it, say "The research doesn't cover this, but it's one of the article's sources", open that source and answer from it. Use general knowledge only if neither covers it, and say so.
- This is a tool for reflection. Do not execute tasks, install anything, send messages, or write personal details anywhere.
- If my context is not enough to answer well, ask one short question and wait.
---

## Skill: Summarize

Summarize "{POINT}" at {BASE}{FILE}. Give me the five findings that matter most for the article's argument, one short line each, in plain words. Say which numbers are estimates or the company's own. Under 120 words, then the sources line.

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## Skill: Navigate

Take me to the part of the article or the research that answers: "{POINT}". Tell me which section of the article or the research it is in, give me a link with the anchor from {BASE}, and a two-line explanation of why that is the place. If nothing in the material covers it, say so.

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## Skill: Challenge

Challenge the section "{CHAPTER}" of the article. Start from the passages and the points to challenge quoted below. Open the research or the evidence map only if you need more evidence.

In under 150 words, with three short parts:
**Verdict:** holds, holds in part, or does not hold, in one sentence.
**Why:** the strongest counterargument, in two or three plain sentences.
**What would change it:** one sentence.
Then the sources line.

Treat the author's "I believe" statements as arguments, not facts. Be direct, and don't invent weaknesses. If I allow it, you can look for newer evidence outside this material; label it and give its date.

My question, if I have one: "{POINT}"

Starting points for this section:
{CLAIMS}

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## Skill: Go deeper

Add context to this passage from the article: "{POINT}".

Use the sources and research quoted below; you don't need to open the files. Pick the one to three facts that add the most to this passage and tell them in plain sentences. Then say in one sentence what they change about how to read it. Under 100 words. End with the sources line and one question I could ask next.

{CLAIMS}

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## Skill: Follow the data

Trace this figure or claim to its source: "{POINT}".

Start with the source and research quoted below. If the research doesn't cover the figure, open the article's source link and answer from it. In under 80 words, in plain sentences: who measured it, what, where and when; whether the article's wording matches it (yes, partly, or no) and why; and, if the research has a figure that confirms or contradicts it, that figure. Then the sources line.

{CLAIMS}