Ripple effect: If you're sick of seeing AI shoehorned into every aspect of our digital existence, you'll probably be horrified at the sight of AI toys. They've already taken off in China, and are now appearing in the US.
The market for AI toys in China is predicted to grow faster than any other consumer AI sector, writes MIT Technology Review, reaching $14 billion by 2030. That's not surprising when there are around 1,500 AI toy companies operating in the country as of October 2025.
One of the latest models highlighted by the publication is BubblePal. This ping-pong ball-sized device clips to a child's toy, giving it a new lease on life by allowing it to "talk." Priced at $149, it can switch between 39 characters, runs on DeepSeek's large language models, and has sold 200,000 units since last summer.
BubblePal arrived in the US in December 2024 and is now available in Canada and the UK. Other Chinese-made AI toys have also made their way to the US and elsewhere.
It's not just China driving the AI toy industry. California-based company Curio sells several of these devices in the US, including Grem, a plush toy that was designed and is voiced by musician (and Elon Musk's ex), Grimes.
The $99 Grem is designed to converse, tell stories, and learn about the child's personality. It's based on OpenAI's tech, though Curio isn't too revealing when it comes to the details. Grem is one of a trio of AI toys from the company, the other two being Grok and Gabbo.
In June, US toy giant Mattel announced a new partnership with OpenAI. The world's second-largest toy maker (after Lego) said it was interested in developing new AI-powered experiences using OpenAI's models.
Mattel announced another partnership with OpenAI this week to test the new Sora 2 model, though its use appears to be focused on the development of Mattel's toys.
As with all generative AI tools, there are concerns surrounding these toys. Most are programmed not to answer controversial or adult questions and instead push users toward more age-friendly topics, but we've seen plenty of examples of inappropriateness slipping through AI safeguards.
Most of the conversations with these toys, including Curio's, are sent to third parties to transcribe the speech to text for the app. These transcribed conversations are also sent to a guardian's phone.
Some children get bored of even the most technically advanced toys, of course, but one of the biggest concerns is the danger of kids becoming too emotionally attached to an AI toy. One just has to look at the parent suing Character.ai and Google over claims that her son took his own life because he became obsessed with a chatbot based on Game of Thrones' Daenerys Targaryen.