ByteDance, the Beijing-based technology company behind Doubao, China's most popular AI chatbot, is shutting down the service's customizable persona feature as new rules from Chinese authorities increase scrutiny of humanlike AI companions. Alibaba Group Holding NYSE:BABA, a major Chinese technology company, is also disabling similar functionality, while Tencent Holdings (TCEHY), the technology company behind the Yuanbao chatbot, removed comparable features last month. The changes could reshape how China's largest consumer AI platforms develop emotionally engaging products, particularly as regulators seek to reduce the risk of unhealthy attachment among younger users.
The new framework, driven by the Cyberspace Administration of China, prohibits platforms from producing content that may trigger extreme emotions in minors or weaken real-world relationships. It also requires companies to label AI-generated content clearly and remind users that they are interacting with an AI system rather than a real person. The scale of adoption suggests the regulatory shift could affect a large user base, with more than eight million AI agents created on Doubao as of 2024 and nearly 150 million users on Xingye, an AI role-playing service operated by Minimax Group with an international version called Talkie, as of September last year. A Tencent Research Institute survey released in April also found that more than 70% of young Chinese internet users had experienced AI dependency, while around 23% reported regular or habitual reliance.
For investors, the shutdown highlights the growing tension between strong consumer engagement and the compliance costs associated with emotionally sensitive AI services. Zhou Hongyi, founder of 360 Security Technology, suggested that pausing companion agents may be a strategic response to products that carry high risks while generating relatively low returns. Chinese technology companies are already spending heavily in the capital-intensive AI race, and ByteDance has recently introduced Doubao subscription plans costing as much as 500 yuan, or $74, per month for coding and productivity tools. The move may suggest that major platforms are placing greater emphasis on professional AI services with clearer monetization potential while reducing exposure to companion features that require more intensive regulatory oversight.