This AI service is surpassing ChatGPT in young age group

 


Character.ai, the innovative AI app that empowers users to craft their very own AI characters, is gaining ground in the United States, challenging the supremacy of ChatGPT in the mobile app arena. Recent data from market intelligence firm Similarweb reveals that Character.ai's iOS and Android apps, supported by a16z, now boast 4.2 million monthly active users in the U.S., closing in on ChatGPT's 6 million monthly U.S. active users.

This impressive growth comes on the heels of Character.ai's launch in May 2023, when the startup proudly announced exceeding 1.7 million installs within its inaugural week. Although installs do not necessarily translate into users, let alone active ones, the app's ability to retain early adopters and expand its user base in the months following its debut is remarkable, especially given industry averages indicating a 30-day retention rate of just 3% to 4%, with uninstall rates soaring to over 40% after 30 days, as reported by mobile marketing firm Appsflyer.


However, ChatGPT still maintains a considerable lead over Character.ai on the web. The preference of many Character.ai users to build and interact with their AI chatbots on personal mobile devices, rather than through a website, accounts for this discrepancy. Globally, Android data further reinforces ChatGPT's dominance, with 22.5 million monthly active users compared to Character.ai's 5.27 million.

Nonetheless, Character.ai has carved out a niche by attracting a substantially younger demographic than ChatGPT and other AI apps. Approximately 60% of Character.ai's web audience falls within the 18- to 24-year-old age bracket, a percentage that has remained consistent even as ChatGPT's web traffic declined during the summer months.


In contrast, ChatGPT's July traffic showed a decline in the 18- to 24-year-old age group, dropping from 30% in April to 27%. Similar trends were observed with other AI providers, with lower adoption rates among young adults aged 18 to 24. For instance, Perplexity.ai, Midjourney, Anthropic, and Bard saw percentages of 22.7%, 22.3%, 25.3%, and 18.46%, respectively, among this demographic group.


ChatGPT's website visits also experienced a decline for the third consecutive month, falling by 3.2% to 1.43 billion in August, following 10% drops in each of the two previous months, according to Reuters citing Similarweb's data. Moreover, the average time spent on ChatGPT's website dwindled from 8.7 minutes in March to 7 minutes as of August.

Similarweb postulated that Character.ai's sustained usage during the summer months was due to the app's focus on entertainment rather than serving as a homework aid or research tool. While Character.ai's website traffic dipped slightly during the summer, it was offset by the increasing adoption of Character.ai's iOS and Android apps.

The tide seems to be turning for ChatGPT, as Similarweb's data shows a resurgence in traffic with the resumption of the school year. In August, website visits in the U.S. rose by 0.4%, and unique visitors increased by 3% month-over-month in the U.S. and 0.3% worldwide, reversing the downward trend observed in June and July.

With a massive Series A funding injection of $150 million announced earlier this year, valuing the business at $1 billion, Character.ai has ample room to expand its user base. Investors are placing their bets on Character.ai's founders, Noam Shazeer and Daniel De Freitas, both AI experts who previously led a Google research team responsible for creating LaMDA (Language Model for Dialogue Applications), a pivotal language model in the world of conversational AI.

Sarah Wang, a partner at a16z, praised the founders as "trailblazers in AI for nearly two decades," highlighting the powerful platform that Character.ai has developed. This platform's end-to-end combination of model and application allows Character.ai to continuously enhance its product as more people engage with its characters.

As with any emerging technology, it remains to be seen if Character.ai will maintain its appeal among young users or eventually fade as just another AI trend. Character.ai has yet to respond to Similarweb's data, but we will update this report if they provide additional insights.

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