AI Pets Are Here: Are You Ready to Adopt One?

Produced by | NewProductStrategy Finance & Economics | Author | Wu Wenwu

The convergence of AI and electronic pets has ushered in a new era of smarter, more engaging companions, heralding a global AI pet boom.

01 The Rise of AI Pets

In the midst of the AI revolution, almost everything is being transformed. The popularity of AI robots continues to soar, with AI sex robots gaining traction in recent months. Now, a new wave of AI products is capturing the imagination.

Internet-famous AI pet cats have recently gone viral, captivating audiences with their animated charm and storytelling prowess. These are not just simple animated creatures but have garnered significant attention and affection from netizens.

While AI pet cats may be confined to animated short videos, the fusion of AI and pet toys has given birth to fully-fledged AI pets.

NewProductStrategy Finance & Economics has observed a growing trend in AI pets across domestic and international markets. The concept of AI pets is gaining momentum, showcasing a diverse array of types, forms, and functionalities, resonating with an increasing number of users.

Singapore's Lianhe Zaobao recently published an intriguing report titled "A Closer Look at the Trend: AI Pets Capture the Emotional Market with Genuine Expressions." The report delves into how advanced AI technology is making modern AI pets more akin to "soulful" human companions.

Electronic pets or toys are not new; many have interacted with them before. Traditional electronic toys like electronic dogs and cats could move, make sounds, or play music.

However, with the proliferation of technologies such as AI and big data in recent years, AI has infiltrated the toy industry, including electronic pet products. Through current large language models and big data analytics, AI pets can develop unique personalities, engage in communication, interaction, and dialogue with humans, enhancing their functionality and application scenarios.

The report highlights Vanguard Industries, a Tokyo-based innovator, and its popular AI rabbit pet, Moflin. Moflin's cute design has won over users, allowing not just communication but also data storage, retrieval of past conversations, and remembering important events.

The growing popularity of AI pets was also evident at the CES exhibition, a global benchmark for consumer technology.

At CES 2025 earlier this year, AI robotic pets stole the show. From Ropet, which "coos for hugs," to Mirumi, which "shakes its head and pretends to be shy," to Jennie, a biomimetic robotic pet mimicking real pet behavior, each garnered significant attention.

It is clear that an AI pet boom is on the horizon, poised to sweep the globe.

02 The Appeal of AI Pets

So, what drives the increasing popularity of AI pets?

According to NewProductStrategy Finance & Economics, the surge in AI pet popularity stems from multiple factors, with AI imparting greater meaning and special value to electronic pets being a key driver.

Functionally, electronic toys have always been popular, especially among children and adolescents, who see them as cherished companions and memories.

In terms of functionality, AI pets share similarities with traditional electronic toys, with companionship being the cornerstone. However, unlike live pets, which can exhibit genuine emotions, AI-infused electronic pet toys become smarter, capable of dialogue, interaction, and more enriched scenarios.

The allure of AI pets extends beyond live pets in several ways. There's no need for pet food, grooming, health management, or worry about pet illnesses. Moreover, AI pets eliminate the need for pet ownership, saving time and money compared to traditional pets.

AI technology has expanded the possibilities of electronic pet forms, naturally making AI pets increasingly popular, especially among young people who are avid trend followers.

Notably, AI pets cater not just to the companionship needs of youth and children but also fulfill the emotional needs of a broader demographic, creating greater significance and value.

This includes pet owners allergic to pet hair, individuals with health needs like autism, depression, mental sub-health, or stress relief, and elderly people seeking companionship. For instance, elderly people with dementia may experience anxiety, depression, apathy, and anger, and AI pets can provide much-needed companionship, especially for those living alone.

While young people adopting AI pets represents a fusion of laziness and technology enjoyment, the companionship provided to special populations, those with health needs, and especially the middle-aged and elderly, generates substantial social value. The core value AI pets bring to different user groups lies in companionship and the underlying emotional fulfillment.

03 The Billion-Dollar Industry Behind AI Pets

As AI pets gain traction, a multi-billion-dollar industry is emerging.

Data indicates that the market growth rate of AI pets has been increasing annually. According to Technavio's survey, the compound annual growth rate of the physical AI pet market from 2021 to 2026 will be 11.28%.

Behind this year-on-year growth, the market size of AI pets is expanding rapidly. Foreign research institutions estimate that the AI pet market size is projected to reach $6 billion (approximately RMB 43.8 billion) by 2030.

Taking AI pet dogs, a consumer favorite, as an example, some institutions predict that by 2026, the global market size for AI pet dogs alone will exceed $900 million (approximately RMB 6.57 billion).

The influx of numerous domestic and foreign enterprises into this sector is a significant driver behind the increasing intelligence and popularity of AI pets.

For instance, among international AI pet brands, Mirumi from Yukai Engineering in Japan stands out, having launched Mirumi, a plush robot that can be clipped onto the body or bag. Another notable entry is LOOI, an AI robot from TangibleFuture in the US, which attaches a smartphone to a mobile device, causing the robot to "open its eyes" on the phone.

Similarly, many renowned domestic enterprises and startups are also making strides in the AI pet sector. For instance, TCL, a television giant, has released a concept companion robot called Ai Me.

KEYi Tech, a domestic enterprise, has designed a pet robot named Loona, a ChatGPT-powered children's companion robot that can respond to commands, engage in casual conversations, recognize faces, and adapt to user habits. It also functions as a home security monitor and plays interactive games like fetching balls.

Many Chinese AI pet enterprises are not only applying AI technology to electronic pets but also aiming to endow them with greater value, such as cultural IP integration and social scenarios, hoping to create the "Pop Mart" of the AI pet world.

Undoubtedly, AI pets are becoming increasingly popular in both domestic and international markets and will gradually evolve into a major industry in the future.

However, it's crucial to consider the flip side of AI pet development, which involves data privacy and security concerns.

AI pets can record users' habits through adaptive learning algorithms to optimize behavior patterns, enhance interaction, and facilitate in-depth communication. For AI pet enterprises, safeguarding data privacy and security has become paramount.

Furthermore, like other AI companion robots and AI sex robots, AI pets face the challenge of preventing user over-addiction, a common issue for AI pet robot enterprises globally.

Overall, AI pets are the product of the fusion of AI and electronic pet toys, representing a broader trend and offering users companionship and emotional value. Behind this trend lies a vast business opportunity.

In the future, we can expect to see more AI pets with enhanced functionalities and intelligence. The AI pet boom is here to stay.

So, are you ready to welcome an AI pet into your life?