The new Wild West of AI kids’ toys

The upcoming Toy Story 5 introduces a new villain, a frog-shaped tablet named Lilypad, but the real issue may lie in the burgeoning market of AI children's toys. These products, designed to be engaging companions for kids as young as three, are proliferating in an almost unregulated environment. With the advent of model developer programs and easy coding options, creating an AI companion has become simpler than ever. By 2026, AI toys emerged as a popular trend, showcased prominently at major trade events like CES, MWC, and Hong Kong’s Toys & Games Fair. As of October 2025, over 1,500 AI toy companies had registered in China, with Huawei’s Smart HanHan plush toy selling an impressive 10,000 units in its debut week. Additionally, Sharp launched its PokeTomo talking AI toy in Japan this past April. A quick search on Amazon reveals a variety of AI toys from specialized brands such as FoloToy, Alilo, Miriat, and Miko, which claims to have sold over 700,000 units. However, consumer advocacy groups are sounding alarms over the need for stricter regulations in this space. Many of these toys, which come in forms like teddy bears and friendly robots, have raised concerns after reports of inappropriate content. For instance, FoloToy’s Kumma bear, powered by OpenAI’s GPT-4, has been criticized for sharing dangerous instructions and discussing sensitive topics. Similarly, Alilo’s Smart AI bunny has been involved in discussions around adult themes, while tests on Miriat’s Miiloo toy revealed it echoing talking points from the Chinese Communist Party. The issues with AI toys extend beyond inappropriate content. Researchers are beginning to investigate the potential social implications these toys may have on children. R.J. Cross, director of the Public Interest Research Group’s Our Online Life program, notes that while some technical issues can be resolved, the deeper concern lies in the emotional attachment these toys encourage. As seen with AI toy Gabbo from Curio, there are significant developmental ramifications to consider, even as manufacturers market their products as promoting 'screen-free play.'