AI avatars open up new challenges for marketers
Character.AI’s Terms of Service state that users must comply with its impersonation policy. The policy prohibits “deepfakes or impersonation of any kind, including but not limited to those that create political misinformation, perpetrate frauds or scams, impugn the reputation of third parties, or otherwise amount to harmful conduct.”
The use of AI avatars—an increasing interest to marketers—has reignited debates over the ethical use of AI-generated characters, especially when they involve creating replicas of real people without consent. Deepfake technology has long been a concern for celebrities and political figures. As this technology becomes more accessible, it threatens to erode public trust in AI and harms the relationship between companies and its audience.
“Marketers strive to build trust with their audience,” said Nicole Greene, vp analyst at Gartner. “If AI avatars are created using the likeness of real people without their knowledge or consent, it can erode trust and authenticity. Consumers may feel deceived or manipulated, which can harm the relationship between the brand and its target audience.”
Greene added that marketers need to better evaluate whether their agencies and partners follow ethical guidelines when using AI.
Founded by ex Googler Noam Shazeer, Character.AI raised $150 million in a Series A round last year, led by Andreessen Horowitz, reaching a valuation of $1 billion.
Charcater.AI allows users to create and engage with AI-powered characters. The platform has doubled its monthly users over the past year with more than 20 million monthly users. The company powers 100 million unique characters, per TechCrunch. This week, Character.AI appointed Erin Teague, a former YouTube executive, as its chief product officer.
In August, Axios reported that Google plans to sign a non-exclusive license for Character.AI’s model that will buy out Character.AI’s venture investors at a valuation of approximately $2.5 billion.
Crecente, Jennifer’s father, has opened a case with Character.AI and received confirmation of an investigation as of 9:51 a.m., but no resolution has been provided since, he told ADWEEK.
“It’s irresponsible for technology companies to lack proper safeguards when harms like this are foreseeable,” said Crecente.