User spending goes up by more than 4000% on AI-powered apps - TechCrunch

Welcome to the forefront of conversational AI as we explore the fascinating world of AI chatbots in our dedicated blog series. Discover the latest advancements, applications, and strategies that propel the evolution of chatbot technology. From enhancing customer interactions to streamlining business processes, these articles delve into the innovative ways artificial intelligence is shaping the landscape of automated conversational agents. Whether you’re a business owner, developer, or simply intrigued by the future of interactive technology, join us on this journey to unravel the transformative power and endless possibilities of AI chatbots.
Latest
AI
Amazon
Apps
Biotech & Health
Climate
Cloud Computing
Commerce
Crypto
Enterprise
EVs
Fintech
Fundraising
Gadgets
Gaming
Google
Government & Policy
Hardware
Instagram
Layoffs
Media & Entertainment
Meta
Microsoft
Privacy
Robotics
Security
Social
Space
Startups
TikTok
Transportation
Venture
Staff
Events
Startup Battlefield
StrictlyVC
Newsletters
Podcasts
Videos
Partner Content
TechCrunch Brand Studio
Crunchboard
Contact Us
Given the rising interest in generative AI tools like text-based ChatGPT and image-based Midjourney, AI-powered apps are growing in numbers and popularity in both app stores.
A report by analytics firm Apptopia suggests that 158 AI Chatbot apps — with the description having keywords like “AI Chat” or “AI Chatbot” — hit the app stores in the first quarter of this year. That’s a 1480% increase year-over-year, mostly thanks to OpenAI publicly releasing ChatGPT API in March.
The data suggests that multiple apps like Nova AI, Genie AI and Chat with Ask AI have broken into top charts in app stores — a lot of these apps are similarly named, so it’s easy to get confused between them. At the time of writing, Chat with Ask AI is on the top 10 free apps list on iOS in multiple countries.
Apptopia mentions in the report that developers are trying to convert AI chatbot tech, which is easily available on a web browser, into a native mobile experience and charging money for it. Most of the time these apps charge users for unlocking unlimited (or large number of) conversations with the chatbot.
Yalçın Özdemir, founder & CEO of AppNation, which makes Genie AI, told TechCrunch over an email that the app had over 2.5 million downloads in March. He said that the app now has more than 100,000 paid users and raked in $1.5 million in revenue last month.
The analytics firm noted that downloads for AI-powered apps have increased by 1506% year-on-year, with the number reaching nearly 20 million in March. The in-app spending has also increased, clocking almost $3 million in March — a massive 4184% increase year-on-year.
Data compiled by Bernstein and app analytics company data.ai (formerly App Annie) paints a more rosy picture. It says that user spending on the top 10 GPT-3 powered AI apps reached $6 million in February 2023.
While most of these apps use the same base technology, they try and create differentiation by helping people with diverse prompts or by introducing multiple versions of bots with different abilities or moods. For instance, Quora’s Poe allows users to interact with multiple chatbots powered by ChatGPT, GPT-4, Claude and more. All these bots have different personalities, so you can interact with them for different use cases. Earlier this week, the app launched a new feature that lets users create their own bots just using prompts. Some early examples include a pirate language bot, a bot that converts messages into emojis and a Japanese language tutor bot.
Apart from indie developers, this new popularity wave of AI-powered apps has also benefited Microsoft. The company announced the integration of OpenAI tech with Bing earlier this year. Apptopia said that since then, Bing’s average daily downloads have increased by 1000%. While the search app got into the App Store’s top charts in February, the rank quickly fell and the downloads still remain 1/10 of Google downloads, according to data.ai.
Bernstein’s analysis also suggests downloads for Microsoft’s Edge browser, which also integrated an AI chatbot powered by OpenAI tech, jumped 135% year-on-year in Q1 2023. The firm said that the browser reached 1/3 of Chrome’s download volumes for this period.
Despite this rise in popularity, analysts at Bernstein are being cautious. They said that it is “too early to comment on whether any of these pure-play AI-assistant apps have staying power.” This signals that AI-powered chatbots are novel use, but the longevity of interest in them is yet to be tested.
But this onslaught of AI apps also brings dubious tools to the app stores. Last week, China-based tech giant Baidu sued Apple for allowing counterfeit apps of its Ernie bot on the App Store. Earlier this year, many apps labeled “ChatGPT” flooded the App Store and the Play Store at a time when OpenAI hadn’t released an official API.
Topics
Ivan covers global consumer tech developments at TechCrunch. He is based out of India and has previously worked at publications including Huffington Post and The Next Web.
You can contact or verify outreach from Ivan by emailing im@ivanmehta.com or via encrypted message at ivan.42 on Signal.