Character.ai, a developer that lets users design their own artificial intelligence characters, is catching up with ChatGPT in usage of its mobile app. Character.ai's iOS and Android apps powered by a16z currently have 4.2 million monthly active users in the U.S., while the ChatGPT mobile app has nearly 6 million monthly active users in the U.S., according to a recent analysis by market intelligence firm Similarweb.
This is another significant increase following the launch of Character.ai in May 2023, when the startup shared that it surpassed 1.7 million installs in its first week. Of course, the number of installs is not the same as users, let alone active users. In fact, according to data from mobile marketing company Appsflyer, the 30-day retention rate of general mobile applications is 3-4%, and the uninstall rate after 30 days exceeds 40%. This means that Character.ai managed to retain some early users and increase usage in the months after launch.
Still, ChatGPT is far more used on the web than Character.ai -- likely because many of Character.ai's users prefer to build and interact with AI chatbots on their personal mobile devices rather than through the website.
Globally, Android data shows that ChatGPT is still far ahead of Character.ai on the mobile terminal. ChatGPT has 22.5 million monthly active users, while Character.ai has 5.27 million.
However, Character.ai attracts a much younger user base than ChatGPT and other artificial intelligence applications. On the web, for example, Character.ai attracts nearly 60% of users in the 18-24 age group, a number that remained constant over the summer even as ChatGPT’s website traffic dropped.
In July, users aged 18-24 accounted for only 27% of ChatGPT traffic, down from 30% in April. New data shows that other AI providers also have lower adoption rates among the 18-24-year-old demographic. For example, Perplexity.ai, Midjourney, Anthropic, and Google's Bard account for 22.7%, 22.3%, 25.3%, and 18.46% of the 18-24-year-old demographic, respectively, compared to Character.ai's 60%.
Citing data from Similarweb, Reuters reported that ChatGPT’s global website visits also fell by 3.2% in August to 1.43 billion, while visits in the previous two months fell by 10%. Additionally, ChatGPT’s website visit time dropped from an average of 8.7 minutes in March to 7 minutes in August.
Similarweb speculates that Character.ai’s usage was maintained during the summer break because the app is designed for entertainment rather than as a homework helper or research assistant. However, the company noted that Character.ai's website traffic dropped slightly over the summer, but that was more than made up for by mobile users adopting Character.ai's iOS and Android apps.
ChatGPT’s decline is now turning around. Similarweb found that with the arrival of the back-to-school season, ChatGPT’s traffic in the United States began to rebound, with website visits increasing by 0.4% in August. After declining in June and July, unique visitors in the United States increased 3% month-on-month in August, with a global increase of 0.3%.
Character.ai announced a massive $150 million in Series A funding earlier this year, valuing the business at $1 billion, so it has a lot of room to grow to further expand its user base. While there are many AI character generators on the market, investors are betting on the founders of Character.ai. The startup was founded by Noam Shazeer and Daniel DeFreitas, artificial intelligence experts who led the Google research team to build the language model LAMDA (Language Model for Dialogue Applications).
When a16z received investment, GPSarah Wang called the founders "pioneers in the field of artificial intelligence for nearly two decades. They have built a powerful platform that combines models and applications end-to-end to make Character er.AI is able to continuously improve its products as more people create and use its characters. "
Of course, it remains to be seen whether young people will continue to adopt Character.ai, or if it will become another AI fad.