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

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 publically releasing ChatGPT API in March.

Image Credits: Apptopia

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.

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.

Image Credits: Apptopia

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 1/10th 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.

User spending goes up by more than 4000% on AI-powered apps by Ivan Mehta originally published on TechCrunch