Character.ai, an AI app developer that empowers users to create their own AI characters, is gaining ground on ChatGPT in terms of mobile app usage. A recent study conducted by market research company Similarweb reveals that Character.ai’s iOS and Android apps now boast 4.2 million monthly active users in the United States, while ChatGPT’s mobile apps have nearly 6 million monthly active users in the U.S.
Character.ai has shown impressive growth since its launch in May 2023, initially reporting over 1.7 million installs within its first week. It’s important to note that installs don’t necessarily translate to active users, considering the common challenges of retaining users in the mobile app landscape. On average, mobile apps have a 30-day retention rate of 3% to 4%, and uninstall rates often exceed 40% after 30 days, as reported by mobile marketing firm Appsflyer. Character.ai appears to have overcome these hurdles by successfully retaining a portion of its early adopters and steadily increasing its user base in the months following its launch.
However, when comparing Character.ai to ChatGPT, the latter still maintains a dominant presence on the web. This discrepancy may be attributed to the preference of many Character.ai users for building and interacting with their AI chatbots on their personal mobile devices rather than using a website.
On a global scale, Android data indicates that ChatGPT continues to maintain a significant lead over Character.ai in terms of mobile app usage, with 22.5 million monthly active users for ChatGPT compared to 5.27 million for Character.ai.
Character.ai has managed to carve out a niche by attracting a noticeably younger demographic compared to AI apps like ChatGPT. On the web, Character.ai’s audience is comprised of nearly 60% of users falling into the 18- to 24-year-old age group. This demographic dominance has remained consistent even throughout the summer, a period during which website traffic to ChatGPT experienced a decline.
To provide context, in July, the 18- to 24-year-old age group represented just 27% of ChatGPT’s web traffic, a slight decrease from the 30% observed in April.
The data reveals that other AI providers have also struggled to gain traction among the younger demographic aged 18 to 24. In comparison to Character.ai’s substantial 60% figure, the percentages of this age group for Perplexity.ai, Midjourney, Anthropic, and Bard were notably lower, at 22.7%, 22.3%, 25.3%, and 18.46%, respectively.
ChatGPT has experienced a trend of declining global website visits for the third consecutive month, with a 3.2% drop to 1.43 billion in August. This comes on the heels of 10% drops in each of the two preceding months, as reported by Reuters, citing Similarweb’s data. Additionally, the average time spent on ChatGPT’s website has dwindled from 8.7 minutes in March to 7 minutes as of August.
Similarweb speculates that Character.ai’s sustained usage throughout the summer could be attributed to the app’s entertainment-focused nature, as opposed to serving primarily as a homework aid or research assistant. Notably, while Character.ai’s website traffic experienced a slight dip during the summer, the adoption of its iOS and Android apps by mobile users helped compensate for this decline, as noted by the firm.
Interestingly, ChatGPT is showing signs of a turnaround, particularly in the U.S., as the school year resumed. Similarweb’s analysis indicates that ChatGPT’s website traffic experienced a 0.4% increase in August. Moreover, there was a 3% month-over-month rise in unique visitors in the U.S. and a 0.3% increase worldwide in August, following declines in June and July.
With a substantial $150 million in Series A funding announced earlier this year, Character.ai has ample room for further expansion of its user base. This funding round valued the startup’s business at $1 billion. Notably, the AI character generator market features several players, but investors have shown confidence in Character.ai’s founders, Noam Shazeer and Daniel De Freitas. Both are renowned AI experts who previously led a Google research team responsible for creating LaMDA (Language Model for Dialogue Applications), a language model that plays a crucial role in enhancing conversational AI experiences.
At the time of a16z’s investment, GP Sarah Wang praised the founders as “trailblazers in AI for nearly two decades” and emphasized the potency of Character.ai’s platform, which combines both model and application to continually enhance its product as user engagement grows.
While Character.ai has not yet responded to requests for comment on Similarweb’s data, it will be intriguing to observe whether young users continue to embrace the platform or if it follows the trajectory of previous AI trends. We will provide updates if a response is received.