AI app Character.ai catches up with ChatGPT in US

Image credits: Character.AI

Character.ai, an AI app maker that allows users to design their own AI characters, is catching up to ChatGPT in terms of mobile app usage. A16z-backed Character.ai’s iOS and Android apps now have 4.2 million monthly active users in the U.S., compared to 4.2 million monthly active users in the U.S. for ChatGPT’s mobile app, according to a recent analysis from market intelligence firm Similarweb. The number of users is approximately 6 million.

Image credits: similar web

This is notable growth since Character.ai launched in May 2023, with the startup announcing more than 1.7 million installs in its first week. Of course, installs do not equate to users, much less active users. In fact, the average mobile app has a 30-day retention rate of 3% to 4% and an uninstall rate of over 40% after 30 days, according to data from mobile marketing company Appsflyer. This means that Character.ai was able to successfully retain some of its early users and increase usage within a few months of its debut.

That said, ChatGPT still significantly outperforms Character.ai on the web. This is likely because many of Character.ai’s users prefer to build and operate their AI chatbots on their personal mobile devices rather than via a website.

And globally, ChatGPT is still far ahead of Character.ai on mobile, according to Android data, with ChatGPt having 22.5 million monthly active users compared to Character.ai. 5.27 million people.

Image credits: similar web

However, Character.ai attracts a much younger demographic than ChatGPT and other AI apps. For example, on the web, Character.ai captures nearly 60% of his audience in the 18- to 24-year-old age range, and even as his website traffic to ChatGPT has declined. Regardless, this number remained the same throughout the summer.

In July, 18-24 year olds accounted for just 27% of ChatGPT’s traffic, down from 30% in April.

Image credits: similar web

Other AI providers also have low adoption rates among young adults aged 18 to 24, new data shows. For example, Perplexity.ai, Midjourney, Anthropic, and Bard had 22.7%, 22.3%, 25.3%, and 18.46% in the 18-24 demographic group, compared to Character.ai’s 60% figure . Each.

Additionally, the number of global website visits on ChatGPT decreased by 3.2% to 1.43 billion in August, after declining by 10% in each of the previous two months for the third consecutive month, Reuters reported. The report cited data from Similarweb. Additionally, his time spent on ChatGPT’s website decreased from an average of 8.7 minutes in March to 7 minutes in August.

Similar Web theorized that Character.ai’s usage persisted over the summer because the app was designed for entertainment rather than as a homework help or research assistant. However, the company noted that although Character.ai’s website traffic dipped a bit over the summer, mobile users who adopted Character.ai’s iOS and Android apps made up for it.

Image credits: similar web

ChatGPT’s decline is now turning around. According to Similar Web, ChatGPT’s traffic is starting to recover as the school year resumes in the US, with visits to the website increasing by 0.4% in August. The number of unique visitors also increased by 3% month-on-month in the US in August, after decreasing in June and July, and worldwide by 0.3%.

Character.ai has a massive $150 million in Series A funding announced earlier this year, and given its business value of $1 billion, Character.ai has the potential to further expand its user base. There is plenty of runway left for the Although there are numerous AI character generators on the market, investors were betting on his Character.ai founder. The startup was founded by AI experts Noam Shazeer and Daniel De Freitas. They previously led a team of researchers at Google that built his LaMDA (Language Model for Dialogue Applications), a language model that helps power conversational AI experiences.

At the time of a16z’s investment, GP Sara Wang called the founders “pioneers in AI for nearly 20 years.”

“They have built a powerful platform that combines both models and applications end-to-end. This allows Character.AI to continue to grow their product as more people create and engage with characters. We are now able to improve our performance significantly,” Wang said.

Of course, it remains to be seen whether young people will continue to adopt Character.ai or whether it will become a new AI fad. Character.ai did not respond to a request for comment on Similarweb’s data, but will update it when it becomes available.