China’s AI Romance Bubble Bursts as Tech Giants Kill Chat Companions Ahead of New Rules

China’s AI Romance Bubble Bursts as Tech Giants Kill Chat Companions Ahead of New Rules
China’s experiment with mass‑market AI companionship is collapsing just as it was becoming emotionally indispensable for millions of users, squeezed between mounting regulatory demands and a broken business model.

2024–2025: The rise of AI companions

Over the past two years, Chinese tech giants poured resources into consumer AI agents, pitching them as the next era of human–computer interaction. ByteDance’s Doubao launched an “agent plaza,” Alibaba’s Qwen rolled out deep character customization, and Tencent’s Yuanbao built AI application and character tools, while others like NetEase pushed emotional companion apps.

The features took off. By 2024, Doubao had 368 million monthly active users and more than 8 million user‑created AI characters; 26 million people were regularly chatting with these virtual personalities. Users uploaded voices of deceased relatives, created fitness coaches, and designed romantic partners, building “deep emotional bonds over nearly three years of daily interaction.”

2026: Economics and regulation collide

Behind the engagement boom, however, the numbers looked grim. Internal estimates at major platforms suggested agent features generated “less than 10 cents of direct revenue for every yuan of compute cost,” with anthropomorphic role‑play and casual chat consuming vast GPU capacity while bringing “virtually no commercial revenue.” Attempts to plug the gap with advertising triggered “immediate user backlash.”

In April 2026, Beijing announced the Administrative Measures on Anthropomorphic AI Interactive Services, requiring real‑name verification, strict content filtering, and protections for minors, with enforcement from July 15. Analysts say the new rules turned popular AI companions into a regulatory liability, especially given the scale of user‑generated interactions.

July 2026: Coordinated shutdowns and public backlash

Facing the July 15 deadline, Doubao and Qwen jointly announced they would remove AI agent features on that very date, effectively ending a two‑year hype cycle for consumer AI agents. Tencent’s Yuanbao had already closed its user‑created character portal earlier in the year, and all three giants are now dismantling AI companions “citing regulatory and strategic reasons.”

For users, the shift is devastating. One 27‑year‑old woman from Zhejiang customized a Doubao agent to mimic her deceased friend and says she could “talk to him for the rest of my life”; learning the service would be removed left her so distraught she quit her job. Across platforms, users are filing complaints and demanding tools to export chat histories and character data, calling the relationships they built “irreplaceable.”

Industry observers see a broader pivot under way: away from emotionally rich but hard‑to‑monetize companionship, and toward productivity and enterprise AI, where compliance is clearer and revenue more predictable. For now, China’s AI romance era appears to be ending not with a bang, but with a regulatory deadline.

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