The news: AI companions, conversational digital interfaces aimed at offering emotional support, entertainment, and assistance, are gaining traction among users.

• The number of dedicated AI companion apps like Character AI increased massively between 2022 and 2025, growing 8 times from 16 to 128 companion-focused apps.
• Usage is growing, especially among younger demographics. Seventy-two percent of teens have used AI companions at least once, and over half (52%) are regular users, per Common Sense Media.
• Meanwhile, over 1 in 5 adults over 18 have used AI tools for companionship, according to Kantar.

The opportunity for advertisers: As AI companions gain attention from consumers, a potential opportunity to reach audiences in a high-trust, personalized environment is emerging.

• If advertising in companion chats eventually becomes widespread, advertisers could use the tool as a key performance driver. Advertising within non-companion AI chatbots is already proving effective: Microsoft Copilot reported a 153% lift in clickthrough rates, and 54% improvement in user experience compared with traditional search ads, per data shared with EMARKETER.
• And brands are seeking to build trust on platforms where consumers are more receptive to purchase recommendations. AI companions, as highly trusted confidants and sources of familiarity, have a strong potential to become a central source for brands if ads in companions go widespread.

The risks: Anyone looking to get into the AI companion space should note the issues that make it a risky investment for now.

• Ethical concerns surrounding AI companions are mounting. Controversies like a Character AI lawsuit over a young user who died by suicide after interacting with the platform are highlighting concerns on the safety and influence of these platforms—which would inevitably trickle down to have an impact on brands who advertise within them.
• Companions are facing growing regulatory scrutiny, particularly regarding minors. The Federal Trade Commission (FTC) opened an investigation into seven providers in September, including Character AI and OpenAI, to examine how these platforms shape character behavior and enforce age controls. The move suggests stricter guardrails are coming that would impact brands.

What advertisers should do: The AI companion space is far too nascent to warrant investment without heightened caution. While more platforms are likely to turn to ads in the future as monetization opportunities remain limited, investment isn’t advised unless these platforms take explicit steps:

• Safe platforms will be those who disclose exactly how companions work, including what data is collected and how personalities are shaped.
• Platforms must maintain emotional safety systems and the ability to refuse certain, dangerous requests that could cause the user harm.
• Partner platforms must include clear age-gating protocols and parental controls as scrutiny on how they interact with minors builds.
• Brands need visibility into conversations and risk flags, and protocol to address inappropriate interactions immediately.

Go further: Read the full breakdown of where AI companions are headed in our FAQ on AI Companions: What They Are, Why They Matter, and How Marketers and Brands Should Prepare.