TL;DR:
- Character.ai’s iOS and Android apps have reached 4.2 million monthly active users in the US, closing in on ChatGPT’s 6 million.
- Despite its rapid growth, Character.ai still trails ChatGPT globally with 5.27 million monthly users compared to ChatGPT’s 22.5 million.
- Character.ai attracts a younger demographic, with nearly 60% of its users aged 18-24, while ChatGPT’s 18-24-year-old user base declined from 30% to 27%.
- ChatGPT experienced declining web visits and reduced time spent on its site, but this trend is reversing.
- Character.ai’s focus on entertainment appears to have helped maintain user engagement over the summer.
- The startup secured $150 million in Series A funding, valuing the company at $1 billion, indicating potential for further growth.
Main AI News:
In the ever-evolving landscape of AI applications, Character.ai, the pioneering AI app developer empowering users to craft their personalized AI characters, is rapidly gaining ground against ChatGPT in terms of mobile app utilization. Recent analysis conducted by market intelligence firm Similarweb has unveiled a significant surge in the popularity of Character.ai’s iOS and Android apps, boasting 4.2 million monthly active users in the United States. This impressive feat is inching closer to ChatGPT’s mobile app, which currently commands nearly 6 million monthly active users in the US.
The acceleration in Character.ai’s user base comes hot on the heels of its May 2023 launch when the startup celebrated surpassing 1.7 million installs in its inaugural week. Notably, app installs do not directly translate to active users, given that the average mobile app grapples with a mere 3% to 4% 30-day retention rate, with uninstallations soaring above 40% after a month, as per data from mobile marketing firm Appsflyer. This suggests that Character.ai has managed to engage and retain a considerable portion of its initial adopters, fueling growth in usage since its debut.
Despite this remarkable progress, ChatGPT maintains its stronghold over Character.ai in the web domain, likely due to the preference of Character.ai’s user base to construct and interact with their AI chatbots via their personal mobile devices, rather than through a traditional website interface.
On a global scale, Android data underscores ChatGPT’s continued dominance over Character.ai in the mobile arena, boasting 22.5 million monthly active users for ChatGPT, compared to Character.ai’s 5.27 million.
Source: Similarweb
However, Character.ai is carving a niche by attracting a substantially younger demographic when compared to ChatGPT and other AI applications. Notably, Character.ai draws nearly 60% of its user base from the 18- to 24-year-old age group. This demographic stronghold persisted throughout the summer, even as website traffic to ChatGPT experienced a decline.
In July, the 18- to 24-year-old segment constituted a mere 27% of ChatGPT’s traffic, down from 30% in April. The new data also underscores the lower adoption rates among younger demographics for other AI providers. For instance, Perplexity.ai, Midjourney, Anthropic, and Bard garnered 22.7%, 22.3%, 25.3%, and 18.46%, respectively, from the 18- to 24-year-old demographic group, lagging behind Character.ai’s impressive figures.
Source: Similarweb
Furthermore, ChatGPT has experienced a third consecutive month of declining global website visits, with a 3.2% decrease to 1.43 billion in August, following 10% drops in each of the two preceding months. The average time spent on ChatGPT’s website has also dipped from 8.7 minutes in March to 7 minutes as of August.
Similarweb speculates that Character.ai’s resilience during the summer months can be attributed to its focus on entertainment rather than serving as a utilitarian homework aid or research assistant. While Character.ai’s website traffic witnessed a slight decline over the summer, mobile users who embraced its iOS and Android apps more than compensated for it.
The tides are turning for ChatGPT as well, with Similarweb’s findings indicating a resurgence in traffic as the school year recommenced. In August, website visits for ChatGPT in the US recorded a 0.4% increase. Furthermore, unique visitors experienced a 3% month-over-month rise in the US and a 0.3% increase globally in August, marking a reversal from the declines witnessed in June and July.
Character.ai, backed by an impressive $150 million in Series A funding earlier this year, valuing the company at $1 billion, is poised for further expansion of its user base. In a marketplace replete with AI character generators, investors have shown their faith in Character.ai’s founders, Noam Shazeer and Daniel De Freitas, esteemed AI experts who previously spearheaded a Google research team responsible for developing LaMDA (Language Model for Dialogue Applications). This language model plays a pivotal role in enhancing conversational AI experiences.
At the time of a16z’s investment, GP Sarah Wang hailed Character.ai’s founders as “trailblazers in AI for nearly two decades” and commended the platform for its comprehensive blend of model and application, enabling Character.ai to continually enhance its product as more users create and engage with its characters.
While the future holds promise for Character.ai, the question lingers: Will the younger demographic continue to embrace it, or is it destined to be yet another fleeting AI trend? Character.ai has not responded to Similarweb’s data analysis request at this time, but we will keep you updated should a response be provided.
Conclusion:
Character.ai’s impressive growth and appeal to a younger audience signal a changing landscape in the AI app market. While ChatGPT maintains its global dominance, Character.ai’s ability to retain and engage users offers promise. The shift towards mobile app usage, especially among younger demographics, underscores the importance of creating engaging and entertaining AI applications in today’s market.
