Image Credits: Character.AI
Character.ai, an AI app maker that lets users design their own AI characters, is catching up to ChatGPT in terms of mobile app usage. According to a recent analysis by market intelligence firm Similarweb, the iOS and Android apps for a16z-powered Character.ai are now seeing 4.2 million monthly active users in the US, compared to nearly 6 million monthly US active users for ChatGPT’s mobile apps.
That’s a significant increase after Character.ai’s May 2023 launch, when the startup shared that it topped 1.7 million installs in its first week. Of course, installation does not equate to users, much less active. In fact, according to data from mobile marketing firm Appsflyer, the average mobile app has a 30-day retention rate of 3% to 4% and uninstall rates after 30 days are over 40%. This means that Character.ai has been able to successfully retain some of its early adopters and grow its usage within months of its debut.
That said, ChatGPT still outperforms Character.ai on the web – because many of Character.ai’s users prefer to build and interact with their AI chatbots on their personal mobile devices rather than through the website.
And globally, Android data indicates that ChatGPT is still far ahead of Character.ai on mobile, with 22.5 million monthly active users for ChatGPt versus 5.27 million for Character.ai.
However, Character.ai is attracting a much younger demographic than ChatGPT and other AI apps. On the web, for example, Character.ai attracted nearly 60% of its audience of 18- to 24-year-olds, a figure that held up even as website traffic on ChatGPT dropped over the summer.
In July, 18- to 24-year-olds accounted for just 27% of ChatGPT’s traffic, down from 30% in April.
Other AI providers have lower adoption among the younger 18- to 24-year-old population, new data suggests. Compared to Character.ai’s 60% figure, for example, Perplexity.ai, Midjourney, Anthropic and Bard’s percentage of the 18 to 24-year-old demographic is 22.7%, 22.3%, 25.3% and 18.46%, respectively.
For the third month in a row, visits to ChatGPT’s global website fell 3.2% to 1.43 billion in August, following a 10% decline in each of the previous two months, Reuters reported, citing same web data. Also, ChatGPT’s website time dropped from an average of 8.7 minutes in March to 7 minutes in August.
Similarweb theorizes that Character.ai’s use has stalled during the summer months because the app is designed for entertainment, not as a homework helper or research aid. However, Character.ai’s website traffic dipped slightly over the summer, but mobile users embraced Character.ai’s iOS and Android apps, the firm noted.
The decline of ChatGPT is also changing now. Similarweb found that ChatGPT’s traffic is beginning to return in the US as the school year resumes, with a 0.4% increase in visits to the website in August. Unique visitors rose 3% month-over-month in the US and 0.3% worldwide in August after declining in June and July.
Character.ai has a long way to go to further expand its user base, having announced $150 million in Series A funding earlier this year for the startup, which had a $1 billion business. Although there are many AI character generators in the market, investors were betting on the founders of Character.ai. The startup was founded by Noam Shazeer and Daniel De Freitas, AI experts who previously led a team of researchers at Google that developed LaMDA (Language Model for Conversational Applications), a language model that helps power conversational AI experiences.
At the time of a16z’s investment, GP Sarah Wang called the founders “trailblazers in AI for nearly two decades.”
“They have built a powerful platform with an end-to-end combination of both model and application that allows Character.AI to continuously improve its product as more and more people create and engage with its characters,” Wang said.
Of course, it remains to be seen if young people will continue to adopt Character.ai or if it will become another AI fad. Character.ai has not responded to Similarweb’s request for comment on the data, but we will update if one is provided.