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  • Writer's pictureRealFacts Editorial Team

The Future of AI in Dating

AI and dating app graphic

The Integration of AI in the Dating World 

Emilia David, a Verge reporter, has extensively covered the integration of AI into the realm of dating, particularly focusing on AI romance bots. She discusses two significant trends: the use of generative AI by dating apps like Tinder, and Hodge (both owned by match group traded under ticker: MTCH) to help users refine their profiles and messages, startups like Volar, which create AI chatbot versions of users that can interact with others’ AI chatbots to determine compatibility before real-life interaction, or messaging. This concept is already being implemented within a few startups and experiments. 

On another take of AI companions, companies like Replika offer AI companions that users treat as friends, therapists, or romantic partners. Though the technology is not as advanced. Users are already forming meaningful connections with these AI companions. 

Whitney Wolfe Herd, the Founder and Executive Chair of Bumble, envisions a future where AI dating concierges could help users navigate the dating landscape by offering advice and even interacting with other AI concierges to find potential matches. This concept reflects the increasing role of AI in personal relationships, though it raises questions about its efficacy and ethical implications. 

The potential risks associated with these AI companion apps are highlighted in a Mozilla report, which scrutinizes their privacy and security practices. The report reveals that many of these apps, such as Talkie Soulful Character AI, Chai, iGirl: AI Girlfriend, and others, are vague about their data collection and protection policies. Of the apps reviewed, only Genesia met Mozilla’s minimum privacy standards. The apps collectively have been downloaded over 100 million times on Android devices, yet they pose significant privacy concerns. Mozilla warns users against sharing sensitive information with these AI companions. 

Growth Challenges for Major Online Dating Companies 

Despite the new rise of AI in dating, major players in the online dating industry, such as Bumble (BMBL) and Match Group (MTCH), face growth challenges. Bumble’s revenue grew by 10% to $268 million in the first quarter, with an 18% increase in paying users. However, its total user base saw its first-ever quarterly decline. Match Group has experienced a decline in users for six consecutive quarters, although its revenue increased by 9% to $880 million. The decline in user engagement, especially among young women, poses a challenge for these companies. 

Both Bumble and Match Group rely on a freemium model, offering basic services for free and charging for premium features. Bumble’s premium service costs range from $19.99 per week to $230 for a lifetime subscription, while Tinder offers three premium packages: Tinder+, Tinder Gold, and Tinder Platinum, with monthly costs of $17.99, $26.99, and $35.99, respectively. Despite their brand strength and extensive app portfolios, the subscriptions are expensive for users and the companies' growth is slowing, impacting their stock value. 

Investor Sentiment and Ethical Challenges 

Investors are wary of Bumble and Match Group due to their uncertain growth prospects, reflected in their lower forward price-to-earnings (PE) ratios compared to the S&P 500, and with price targets for Match group and Bumble being $38.59 and $14.76 however there is a large margin of agreeance with the analyst, these stocks are undervalued in terms of their price and forward PE ratio. Given these challenges, it may be prudent to avoid investing in these stocks

Cole Wall Date: 7/7 

until they demonstrate a return to growth, and AI companionship presents more of an opportunity and less of a risk. 

It is extremely important to note that a lawsuit was started against Match Group for making their dating apps too “gamified,” “predatory,” and a dopamine-manipulating product.” At the rate they are going with concerns of their apps being too gamified causing addition to the apps, AI companions and the current ethical concerns and relationships that are being built with them could only add to the stigma. 

Final Words 

The integration of AI into dating presents exciting possibilities but also significant challenges, on the ethical and financial side, particularly concerning privacy, and addiction with the current business models in the online dating industry. I rate Bumble and Match Group a “Hold” for now as the AI companionship models presents both developing opportunities and threats, the valuations are good and forecasted growth is fair however the news of dating AI companionship has not produced enough momentum to cause a buying opportunity. Along with lawsuits already in the air and many mixed concerns not much is for certain.


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