Character.ai, the popular and controversial chatbot company founded by a former Google engineer, is expanding in a surprising way: launching a microdrama division.
The company announced Thursday that it has produced a number of AI-driven animated microdramas for its app, commissioned Hollywood screenwriters to write the episodes, and generated the episodes using artificial intelligence rather than traditional animation techniques. AI will also be introduced after the series is produced, allowing users to chat with the characters and participate in creating their own fan fiction-style chatbots based on the characters.
Representatives for Character.ai declined to provide the names of those working on the vertical video series, but said the company has hired writers and artists with past credits on projects for Nickelodeon, Netflix, DreamWorks and Blumhouse. (Of course, many Hollywood creators are reluctant to publicly commit to AI-related employment.)
Three series will be dropped at launch. They include: Last summer, A story about a young woman who tries to find out the identity of her summer love. night game, A group of 20 or so people gather for a dangerous game, presumably in a haunted house. and eden falla kind of hunger games～Encounter～ready player 1 The story takes place in a group that is “beta testing” a new MMORPG. Of the episodes shown to journalists, the last show, with the most sophisticated concept and the most convincing animation, turned out to be the most fascinating.
Microdramas — young adult fiction series that have become wildly popular over the past year — make money for viewers by selling more episodes and premium subscriptions. Character.ai, also known as c.ai, believes it can generate additional revenue streams through chatbot engagement and fan fiction elements. (The possibility of direct role-play episodes is technically at least a year away, CEO Karandeep Anand said.) hollywood reporter. )
AI is a natural fit for microdramas, as this category tends to have high output and short production times. Automation speeds this up even more. According to Anand, c.ai’s timeline takes about 40 days to complete an entire series, compared to six months if the company traditionally animates the episodes. But despite the efficiency, he says c.ai wants to produce fewer series and higher quality. “Our goal is not to create an AI slop machine for Gen Z,” he says. The microdrama format was appealing because it avoided the doomscrolling and anger-mongering that dominated the pre-AI era, he added. “Users are interacting rather than passively consuming social media,” he said.
Still, live-action AI microdramas have generally failed when attempted in the United States, where consumers often build fandoms around real-life actors. And microdrama influencers tend to oppose them. Character.ai has not announced any plans to enter the live-action space at this time, instead focusing on the less established area of animated microdramas.
Character.ai has proven to be extremely popular since it was officially launched two years ago (it was in beta for two years before that) courtesy of two Google engineers who founded LLM Google LaMDA. Today, at least 20 million users create and/or use chatbots every month to do everything from asking for advice to playing text-based games. Most users are under the age of 35, and the number of “characters” (chatbots with their own training data) is in the millions, often built to mimic the qualities of your favorite Hollywood characters.
Character.ai has been quite controversial, being the subject of multiple lawsuits and allegations that its chatbots promote addiction, mental illness, and sometimes self-harm, with little guardrails or parental notification. In one high-profile case, Florida mother Megan Garcia claimed her son Sewell Setzer III died by suicide as a result of extensive interactions with multiple bots on Character.ai. The lawsuit was settled in January. Two Texas families are also suing the company, and Pennsylvania is suing c.ai for “unlawful medical practices” for allegedly inappropriate representations and disclosures of its medical chatbot. c.ai is part of a backlash against so-called “chatbot psychosis” (a pop term), with Missouri Sen. Josh Hawley requesting documents from the company and several other tech giants over concerns about alleged harm to minors. Overreliance on AI companions and characters.
The move to microdramas appears to be an attempt to diversify a business facing significant headwinds and beyond the close buddy-style relationships that cause many of those problems. But Anand says the fit is natural. “We’ve always been an entertainment company,” he said, noting that many chatbots are already based on TV and movie characters.
The company banned users under 18 last fall to address concerns about social harm. The microdrama is, in a sense, an attempt to bring them back. Users under the age of 18 can watch the series, but chat functionality will be disabled if age verification is not performed.
c.ai, valued by many experts at between $500 million and $1 billion, had revenue of $50 million last year, an increase of 66 percent from 2024, estimated by an outside firm. The company also has a close relationship with Google, and in 2024 Alphabet hired founders Noam Shazier and Daniel de Freitas and signed a non-exclusive agreement for its technology, although the two remain separate entities.
The microdrama market is crowded, with dozens of companies in and around Los Angeles, including CandyJar, ReelShort, and DramaBox, producing large amounts of video for quick consumption.
Anand said he is not worried about saturation given the preferences of the people that c.ai currently reaches. “They are already coming to our platform for entertainment,” he said. “This is a new way to give it to them.”
