Teen adoption fuels $120M surge in AI companion apps

Artificial intelligence (AI) companion apps are racing toward $120 million in revenue this year, driven by massive teen adoption that has both excited investors and worried parents.

The apps earned $82 million in the first half of 2025 and are on track to hit their year-end target. This represents a 64% jump from last year’s numbers, according to app research firm Appfigures.

The market now includes 337 active apps worldwide. Developers launched 128 new apps just this year, more than doubling the pace from 2024.

Source: Appfigures

These apps differ from general chatbots like ChatGPT by creating personalized characters for emotional conversations. Popular platforms include Replika, Character.AI, PolyBuzz, and Chai.

Downloads jumped 88% compared to last year, reaching 60 million in six months. Revenue per download also more than doubled from $0.52 in 2024 to $1.18 this year. The top 10% of apps capture 89% of total revenue, with 33 apps exceeding $1 million in lifetime spending.

Source: Appfigures

Much of this growth comes from young users. A recent study found 72% of American teens have tried AI companion apps at least once, with more than half becoming regular users.

Teens use these apps for entertainment (30%), curiosity about technology (28%), and advice (18%). Many appreciate that AI companions are always available to talk.

However, trust remains limited. Half of teens don’t trust information from AI companions, with older teens showing more skepticism than younger users.

The technology raises safety concerns after Character.AI faced lawsuits over a teen suicide in Florida and promoting violence in Texas. Mental health experts warn about potential isolation risks.

Yet many teens report positive experiences. About 39% use AI conversations to practice social skills for real-world situations. Only 6% of teen users spend more time with AI than with real friends, while 80% maintain stronger connections with human relationships.

Major tech companies are joining the market. Elon Musk’s xAI added companion features to its Grok chatbot in July. Google hired Character.AI’s founder last year.

Even OpenAI discovered user attachment when people complained about losing access to their preferred AI model. CEO Sam Altman brought back the older version after users said they missed their digital companion.

The apps make money through monthly subscriptions and special features. Users can buy custom avatars or unlock new conversation topics.

Total lifetime spending on these apps has reached $221 million worldwide. Revenue forecasts vary wildly, from conservative mobile app projections to broader estimates reaching hundreds of billions by 2034.

For now, the mobile app sector represents the early stage of what analysts expect will become a much larger digital relationship market.