Ownable AI Characters

Last week, someone in the Band of Insiders WhatsApp Community shared some interesting things he was seeing with regards to AI characters and social media. (thanks for that!) Now that triggered two things for me: 1) is what we discussed last week, which is the change that is happening in social media and all the new platforms that are popping up. (read it here if you haven’t already) 2) how will AI characters change the social landscape and entertainment market?

The latter is what I want to dive into today. How will AI characters affect the platforms that we now all use and how will some people turn it into very profitable businesses?

How does Social Media actually work?

As always, let’s start at the beginning. How does social media actually work? How does your feed get filled with content?

There are two important topics to discuss here, the graph and the algorithm.

Graph: the map of connections.
• Nodes: people, posts, topics, or agents.
• Edges: the relationships between them: follows, DMs, likes, saves, watch time.
• Edges often get weights. Example: a DM is a stronger edge than a like.

So the graph is basically a large map of the things you have done with your social media account.

Algorithm: the rules that use that map.
• Pulls candidates from the graph: posts from people you follow, topics you linger on, a few fresh tests.
• Ranks those candidates with a model that predicts what you will watch, save, reply to, or hide.
• Updates the graph after you act, so the loop keeps learning.

The algorithm then decides what to serve you based on the graph and its own knowledge and experience.

Social media changed, a lot

When social media started, it ran on the friend graph. That means your feed was mostly people you knew. The system looked at connections like follows, tags, comments, and DMs, then surfaced posts from those relationships. Early Facebook and early Instagram felt like this: your cousin’s vacation photo showed up because you were connected, not because “beaches” was your topic.

Over time the center of gravity moved to the interest graph. Now the feed cares more about what you engage with than who posted it. Watch two latte-art clips to the end and save one, and you will see more coffee content from creators you do not follow. TikTok’s For You page made this pattern obvious, and every platform followed with Explore pages, Reels, Shorts, and similar surfaces.

Why the shift happened
• The supply of content exploded. Platforms needed a way to sort it beyond who-knows-who.
• Short video made “what holds attention” a stronger signal than a social connection.
• People follow more accounts than they can keep up with, so ranking by interest keeps feeds fresh.

Now the big question is, what will all the AI generated content do to these graphs? Will the social platforms change it again? As I alluded to last week already, one possible outcome that social platforms will give us more control over what we will see. Just like OpenAI announced for its Sora app. Not only that you can tell it what type of videos you want to see more of, but also maybe with “human only” created content instead of AI.

But what are the social media companies going to do about the possible upcoming flood of AI Characters with their own, AI controlled, social media accounts?

When characters join the graph

What will platforms do when AI characters run their own accounts and post autonomously? We are about to find out. Character accounts already create, comment, and DM at scale. The question is not if they show up in our feeds, but how the system treats them.

A great example that is already happening, is AIxbt on X (Twitter). The first time I mentioned this account was in my second newsletter ever, back in December 2024. Then, it just had reached 100,000 followers. Now it sits at 471,000 followers. Forbes describes how the agent scans 400+ key opinion leaders and replies to posts with timely insights and real market data. Making it a valuable and very interesting source for many crypto traders.

Again, to reiterate, this account is fully automated. The people who created this do NOT decide what it will post (or not). They are solely focused on expanding it’s capabilities, including new sending DMs to people who pay it a fee, for more real-time updates.

It’s a pretty simple, but maybe a big shift. The graph used to be people posting to people. Soon it will be people and characters posting to people and characters. That changes the map and the rules.

What might be changing in the graph
• Nodes: add characters and copilots alongside people, creators, and brands.
• Edges: add conversations and actions. Not just follows and likes, but ask, answer, join, book, buy.
• Weights: add trust and usefulness. A helpful action in chat may count more than a passive view.

The early success of AI Characters

That people want to talk to specific AI characters has already become very clear thanks to the success of Character.AI. As we already hinted to last week, Character.AI is a very popular AI platform and the numbers are staggering.

Character.AI serves about 20 million monthly active users, and they are sticky: users spend 75–80 minutes per day chatting with characters. The audience skews young and female, with roughly half Gen Z or Gen Alpha. As discussed last week, Character.AI also rolled out an AI-native Feed in its mobile app for short, remixable character posts, scenes, streams, and clips.

Meta has also rolled out AI Characters to chat with in multiple versions. First the celebrity versions where you can chat with an AI version of Tom Brady for example, which launched at the end of 2023.

This wasn’t a great success and got shut down almost a year later in 2024.

Currently, they are more focused on their “AI Studio” which is a way for people to launch their own AI characters.

Of course, with almost every new technology, things get misused and go to the extreme first 😅. In people’s Facebook and Instagram feeds a bunch of these AI Characters started popping up with some very… euuh.. interesting names.

What might be even “worse” is that millions of messages have been shared with these characters, showing that there is some sort of weird demand for this..

At the moment, these AI characters are all boxed in. Either within the specific Meta category or within platforms like Character.AI.

But what happens if they get a “social media life of their own”? Just like aixbt runs its own X account, what if agents get the power to create other social accounts if they like?

That might be the moment the Agent Graph will really start taking shape. But… I also think this can be a massive opportunity for some creatives out there.

AI Character Ownership

One of the strongest use cases that Ethereum (yes the blockchain, with its cryptocurrency called Eth), is that it can bring property rights to the internet (and to countries who don’t have them, which can unlock opportunities for millions of people and unlock trillions in dead capital, read it HERE). We already saw the start of it with the NFT hype from a few years back, yes the monkey pictures and so forth.

I am not here to give you (another) long argument why NFT technology is so interesting, let’s just say it is and it works 😉.

Some major companies have been involved in building the agentic tech layer that would be needed to take AI Agents, and therefore AI Characters, to a level where they can become sovereign superstars (?). Mainly the Ethereum foundation (again without blockchain no digital property rights), Google and Coinbase.

Here’s the stack that makes ownable characters possible.

1. Passport (Ethereum, ERC-8004): a public agent registry so other apps and AIs recognize the same character across platforms.

2. Ownership certificate (NFT on Ethereum, ERC-8004 compatible): a transferable certificate that proves who owns the character. Optional: add ERC-6551 so the character can hold its own assets and credentials.

3. Debit card with limits (Google AP2 + Coinbase x402): you set spend rules and budgets; the character can pay for small tasks and services, with receipts and user-approved mandates. x402 uses USDC for instant settlement.

4. Phone book for services (Google A2A): a discovery layer where agents find and talk to services; for paid integrations, the x402 Bazaar acts like a marketplace directory.

What all of this technology means, is that you will be able to build a “living” virtual character that can expand itself (with your directions) on many different platforms, you can prove that you own it and can therefore turn this character into a business.

The business opportunity

Now what this unlocks could be pretty damn awesome for some of you! Because you can prove ownership of a digital AI character/agent, you could turn this character into an actual business.

Let’s look back at Character.AI again where creators have been developing characters with massive storylines, full of character traits, backstories and lore. When I looked at their blog I found “Creator Spotlight” articles where they highlight the work of specific creators. Let me introduce you to Vctrii, who they introduce as follows: “Vctrii uses Character.AI to express her emotions and loves developing storylines with her favorite Characters that resonate with her community. Some of her most popular Characters are Henry Wheeler, Andres Estrada, and the Vows and Valor boys.”

Now let’s say Henry Wheeler attracts millions of users on the Character.AI platform, is an AI Agent and its creator owns it as an NFT. This character could expand to other platforms and connect with its fans there as well, just like any other popular (human) influencer or celebrity does as well.

Think of the character as a small studio that can work in three places at once. Short clips and posts win discovery on the interest graph. Community chats and recurring storylines build trust on the friend graph. Helpful actions in the thread turn attention into revenue on the agent graph. If “Henry Wheeler” is ownable, you can take him wherever the audience moves and keep the receipts clean.

Licensing becomes easier when ownership is clear. If a game studio or a streaming partner wants Henry as a cameo, you can grant rights for a season, set splits, and track payouts. If a toy company wants a limited run, you can do that too.

I can totally see these AI characters being used inside games as attention grabbers, just like we saw a bunch of celebrities pop up in games like Call of Duty and Fortnite.

Next, a movie? Sure why not! You get the point. The future is going to be wild.

Closing thoughts

In March of this year I wrote an article titled “Will Your Next Favorite Celebrity Be An AI?”. Back then, all the tech we just discussed was not available yet. Seeing the progress in both AI and blockchain, which has the possibility to unlock exactly that; creating an AI Agent superstar, is impressive.

All I know is that six months ago this sounded like sci-fi. Today a character can post, chat, and even pay for tiny tasks under your rules, while you keep the rights. The next breakout “celebrity” might be written in prompts, staffed by a small team, and owned by its creator.

I’m betting we’ll see a wave of weird, wonderful characters that make social feel new again. If that excites you, build now while the field is open.

Much love,

Funs

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^{Over the years, I’ve navigated industries like advertising, music, sports, and gaming, always chasing what’s next and figuring out how to make it work for brands, businesses, and myself. From strategizing for global companies to experimenting with the latest tech, I’ve been on a constant journey of learning and sharing.}

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