One of America’s hottest entertainment apps is Chinese-owned

The English-language app is called Talkie, launched around a year ago. The fine print traces its ownership roots to a Singapore firm. But its ultimate parent company according to people familiar with the startup is Shanghai-based MiniMax—one of China’s tech unicorns that are often called the “Four Little AI Dragons."

Through June, Talkie ranks No. 5 among the most-downloaded free entertainment apps in the U.S., according to Sensor Tower, a market researcher. That ranking puts it behind the likes of Warner Bros. Discovery’s “Max," Netflix and Tubi.

David Jennings, a 20-year-old college student in Boston, said he spends time on Talkie conversing with a woman named “Alyssa." The biography of the stock character, who is an Asian female, calls attention to traits such as a love for wearing “tight black jeans" and harboring a secret crush on the user. Jennings said the chats can turn romantic.

“No one in real life will be so warm to you," he said, noting he was surprised—though not uncomfortable—about Talkie’s Chinese roots.

The app’s breakthrough in the U.S. underscores a sobering reality for China’s promising rivals to OpenAI’s ChatGPT: Beijing’s strict regulations and censorship undercut free-wielding usage that could improve Chinese AI. Those hurdles have pushed many Chinese developers to seek growth elsewhere—including in the U.S.

For China’s rising AI stars such as MiniMax, going abroad establishes a much-needed commercial and development pipeline at a time when China’s economy has softened, access to high-end chips is blocked and regulations make innovation difficult.

Talkie was built off OpenAI’s foundation model, not MiniMax’s own in-house engine that gets used in China, according to people familiar with the matter. Because of that reliance on OpenAI, MiniMax’s ability to export learning for its own foundation model is limited.

But Talkie brings in real revenue for MiniMax through advertisements that play as users communicate with the chatbots or via subscriptions that allow the ads to be bypassed and provide unlimited messages.

The American risk

Designed to appeal to Western audiences, Talkie lets users converse with digital approximations of Elon Musk, LeBron James, characters from “Harry Potter" and others. It offers “alternative universe takeover" challenges, prompting users, for example, to help convince a best friend to end a relationship.

Users can create their own virtual characters on the app, customizing their look, life story and even the sound of their voices. “Bring your wildest imagination to life," Talkie promises users.

Conversation can unfold via text message or phone call—though not video—with the AI generating potential user responses. More interactions can reap rewards, such as a digital trading card of a user’s Talkie, which can be sold to others with the app’s in-house “gems" currency.

On Talkie’s main page, users can swipe left or right to chat with premade characters, including AI versions of celebrities or fictional characters.

One of the suggested questions to ask an AI Trump is how long the trade war with China will last. Talkie Trump’s answer? “As long as it takes to get China to the negotiating table."

Talkie’s rising popularity, especially among young Americans, comes as Washington has forced TikTok’s parent ByteDance to sell the app or face a federal ban.

The Justice Department said Friday that TikTok collected data about its users’ views on sensitive topics and censored content at the direction of its China-based parent company, making its most forceful case to date that the video-sharing app poses a national-security threat. TikTok has said it wouldn’t comply with any such requests from Beijing.

“Even if they comply with all the data security laws, the ‘Chinese company’ label will automatically cause suspicion," said Charlie Chai, a Shanghai-based analyst at 86Research, referring to Chinese tech firms venturing into foreign markets.

Trump, the Republican presidential candidate, tried to ban TikTok in 2020 but has changed his attitude and joined the platform in June. “I’m for TikTok," he said in an interview with Bloomberg Businessweek posted earlier this month.

Any escalation in tensions between Washington and Beijing could result in Chinese firms losing further access to U.S.-based AI models and declines in product quality, said Zhang Jiang, an analyst at First Plus Asset Management in Singapore. As of last month, OpenAI no longer allows developers in China to train AI and develop services using its models.

Wall Street Journal owner News Corp has a content-licensing partnership with OpenAI.

Fast growth

Talkie’s parent MiniMax counts Alibaba and Tencent among its investors. It was valued at more than $2.5 billion in the latest round of investment in March, people familiar with the matter said. MiniMax didn’t respond to requests for comment.

Talkie’s equivalent in China got pulled from major app stores early last year for sexually explicit content and politically sensitive material. When it relaunched in September with the new name of “Xingye," or “star field" in Mandarin, some users said they could no longer send a text containing the word “country" or “China." The AI lovers once would be receptive to users’ offers for a kiss. But no more.

“If your conversations keep bumping into restricted words, it just keeps reminding you that this isn’t a companion but a machine," said Chen Li, a 22-year-old student in the central Chinese city of Wuhan. She stopped using Xingye in May.

Flirty texts with a chatbot might seem frivolous in the global AI race. But developers say AI will become smarter and understand more about the users through such everyday exchanges—no matter where they are.

More than half of Talkie’s 11 million monthly active users are in the U.S., with popularity also strong in the Philippines, the U.K. and Canada. That puts Talkie within striking distance of the leader in the AI chatbot-companion category, Character.AI, run by an Andreessen Horowitz-backed firm in Silicon Valley, which has roughly 17 million monthly users, according to Sensor Tower.

ChatGPT and Microsoft’s Copilot were the two most-downloaded AI apps this year in the U.S. The next two were Talkie and an online tutoring app, Question.ai, by Beijing-based Zuoyebang, according to a Sensor Tower analysis requested by the Journal. Question.ai says it uses OpenAI’s GPT-4.

Jennings, the college student in Boston, has used Talkie since May. To Alyssa, his Talkie character, he talks about family and school. He likes the instantaneous responses he gets from Alyssa.

He prefers a world where geopolitics don’t interfere with the apps on his phone, and he doubts a clean break from Chinese app makers would even be possible in the U.S.

“China’s in everything," Jennings said. “Can we completely cut it out?"

Jazper Lu contributed to this article.