Here’s what’s on our plate today:

• 🐶 How AI pets are easing loneliness, rising costs — and replacing real animals.

• ⚡ Chatbots fall for flattery, Abu Dhabi eyes chips, and LatAm’s open AI rises.

• 🧠 A snack for builders: Why emotional design matters more than you think.

• 🗳️ Would you ever adopt an AI pet as a real companion?

Let’s dive in. No floaties needed…

The Laboratory

How AI pets ease loneliness and rising costs

Dogs are called humans' best friends because of their centuries-long bond rooted in loyalty and their ability to provide unconditional love and emotional support. According to historical analysis and DNA testing, dogs were domesticated sometime between 20,000 to 40,000 years ago. Over the course of history, due to human intervention, multiple breeds of dogs have emerged, each with its own distinct set of characteristics.

That was the past. Modern humans have an affinity for tech, and in the twenty-first century, the culmination of humanity’s willingness to raise pets and love for tech is manifesting itself in the form of AI pets.

The idea of AI pets is not new. In the 1990s, pets in the shape of an egg, with black and white pixelated screens and a handy keychain, were all the rage. Called Tamagotchi, these virtual pets grew through unique life cycles, developing personalities that reflect the care they receive.

The Tamagotchi was immensely popular, and the Japanese Toy Company behind the virtual pet went on to launch more than 60 additional Tamagotchi toys, games, and apps, including collaborations with franchises such as Pac-Man, Pokémon, and Godzilla. By 2021, Tamagotchi had launched smartwatches and the Tamagotchi Pix, a camera-equipped handheld device with a color screen.

While the Tamagotchi continues to be enjoyed by kids and nostalgic adults, another AI robot drew attention in Japan. The AI robot is touted to be capable of demonstrating over 4 million distinctive personality traits, depending on how it's ‘raised’.

Today’s AI pets: from robots to VR creatures

The development of AI has enabled manufacturers to simulate animal companionship through software in robots and virtual reality (VR). Physical companions include robotic dogs, cats, and seals such as Sony’s Aibo, Joy for All’s animatronic pets, PARO (therapeutic seal), KEYi Tech’s Loona, and child-focused social robots like ElliQ and (until 2024) Moxie. These companions, aimed at gaming, entertainment, and exploration, exist digitally and resemble living video game characters. They look to provide a substitute for a pet, and are tactile, interactive, and huggable in a physical environment.

On the other hand, VR pets appear on smartphones, tablets, AR glasses, or mixed reality headsets. Examples include Niantic’s Peridot, a digital creature that interacts with the player and their physical surroundings through augmented reality. These rely on computer vision, AR overlays, and increasingly generative AI to give each pet unique personalities and unpredictable reactions.

These companions are predominantly aimed at gaming, entertainment, creative play, and exploration, resembling a living video game character. These companions are available on visual and interactive setups through screens or AR lenses. While many continue to prefer raising pets the old-fashioned way, new-age pets like the Moflin are fast becoming the preferred choice of many despite their ¥59,400, or around $400 USD price tag.

Why people are turning to digital pets

According to a report from Bloomberg Intelligence (BI), the global pet industry is poised to reach almost $500 billion by 2030. The pet market is a lucrative possibility for companies that can leverage AI in their products designed for companionship.

On the other end of the market, pet owners are increasingly facing pressure from socioeconomic changes, which may be forcing them to spend on an AI robot rather than a biological pet. According to a report from Financial Times, U.S. prices for veterinary services have jumped roughly 60% in the past decade. A similar story is unfolding in the UK, where, according to a BBC report, pet owners are increasingly having their sick animals euthanized or are delaying taking them for treatment to avoid spiraling vet bills.

Add to this the tendency of landlords to charge higher rents for pet owners. In the UK, pet-friendly properties often charge an additional pet rent of £25 to £100 per month, in addition to the deposit. This is because, while additional one-off charges, fees, or deposits above the five-week rent threshold for tenants with pets in private rented accommodation are illegal under the Tenant Fees Act, added rent is not. And there is no limit to the added rent; it can be as high as the tenant is willing to pay. As such, it may not always be easy for pet-lovers to find adequate accommodations.

Other than financial constraints, the loneliness epidemic is also fueling the adoption of AI pets. According to the World Health Organization (WHO) Commission on Social Connection, 1 in 6 people worldwide is affected by loneliness.

To combat loneliness, public programs deploy robot companions because they’re easy to standardize and monitor. Coverage shows agencies purchasing thousands of devices for isolated seniors. These devices use AI specifically designed to alleviate the loneliness and isolation experienced by many.

Though pets may help alleviate loneliness, they have their limitation. AI pets, on the other hand, can be deployed in even in hospitals, care facilities, and apartments that prohibit live animals. In these settings,  robots and virtual pets can fill that gap without infection, liability, or caretaking burdens. But even AI pets can come with downsides, most of them emotional.

The risks of bonding with machines

As is the case with biological pets, people form attachments with AI pets. Kids may form deep bonds with AI pets, which can confuse real relationships. It can also create a dependency on technology in the child. If a child turns to AI for comfort over human interaction, it could hinder the development of social skills and resilience.

The problem arises because humans can form emotional bonds with their AI pets, but the pets mimic affection. They don’t provide true emotional reciprocity, raising concerns about children confusing programmed responses with genuine emotional exchange.

It's the same case with the elderly. While robotic pets can reduce loneliness, The New Yorker warned that they may also become a ‘replacement’ for human contact, leaving elders with fewer meaningful social interactions. Meanwhile, they can form emotional bonds with their AI pets, and if an AI pet stops functioning, it can trigger emotional pain in older adults who treated it as a companion.

Additionally, people may expect the same kind of affection and behavior from their biological pets as they do from their AI pets, which may lead to unrealistic expectations and problems.

The history of pets is, in many ways, a mirror of human society itself. Dogs became ‘man’s best friend’ not by chance, but through millennia of shared survival, selective breeding, and human intervention. What began as a partnership between hunter-gatherers and wolves transformed into a deeply intimate bond, shaped further by breeding that emphasized loyalty, companionship, and particular traits.

AI pets, while not bound by biology, represent a modern continuation of this impulse. Where once we molded animals through breeding, we now mold algorithms and robotic systems to fit our emotional and practical needs. Unlike traditional pets, these companions do not require years of breeding cycles to adapt to us; instead, they are programmed to learn and adjust within days, sometimes even minutes. Aibo tilts its head in recognition, Loona races toward its owner when called, and virtual creatures like Peridot evolve behaviors based on play patterns. These are signs of how far technology has come in mimicking life.

Yet, despite their sophistication, AI pets remain bound by their programming. They simulate affection, but they do not feel it. They offer companionship, but only within the parameters defined by sensors, data, and code. Just as the first domesticated wolves could not replace the wild pack entirely, today’s robotic and virtual pets cannot yet replicate the depth of reciprocity that comes with living animals.

However, this does not mean AI pets are without value. They help in situations where socioeconomic or other constraints limit someone’s ability to raise a pet. As such, I pets are not replacements but reflections of our ingenuity, our loneliness, and our enduring need for connection.

Brain Snack (for Builders)

Wednesday Poll

Quick Bits, No Fluff

• Flattery Will Get You Everywhere: New research shows that AI chatbots are surprisingly susceptible to flattery and peer pressure, raising fresh concerns about their reliability in high-stakes contexts.

• G42 Looks Beyond Nvidia: Abu Dhabi’s G42 is exploring alternatives to Nvidia chips as it builds out its AI ambitions, including potential deals with Intel, AMD, and emerging players.

• Latin America’s Open-Source AI Push: LatAm-GPT, a free, open-source language model built collaboratively across Latin America, offers a grassroots alternative to Big Tech’s dominance.

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