China is leading the charge in integrating multimodal AI models into mass-market toys.
With the market expected to grow to more than $25 billion annually by 2030, the People’s Republic is already positioned to dominate it thanks to its innovation engine, Shenzhen, and shifting perceptions about the mainland. The runaway success of Labubu, created by Beijing-based Pop Mart, has triggered massive investment into China’s AI toy ecosystem, which was already supercharged with the Chinese government’s insistence to lead the world in embodied artificial intelligence.
As giants like OpenAI and Mattel race to turn classic toys like Barbie into smart companions, China’s AI toys are already landing on TikTok shops, Amazon, Facebook Marketplace, and mall kiosks. It’s happening so fast, they’re growing ubiquitous before Westerners can even decide whether that’s a good thing.
Shenzhen Takes Charge
The tech hub of Shenzhen is churning the toys out as it celebrates 45 years since its 1980 designation as China’s first Special Economic Zone (SEZ), which transformed the small fishing village into a global tech metropolis. The Chinese State Council, under the leadership of Deng Xiaoping, chose Shenzhen as part of the experiment that aimed to modernize the republic’s industrial sector and establish China as the world’s factory.
At the time, the People’s Republic of China’s economy was largely agrarian and centrally planned. Shenzhen, with its population of about 30,000, was selected because of its proximity to Hong Kong and access to maritime trade routes.
Today Shenzhen is a city of nearly 18 million that’s perceived as the epicenter of global hardware innovation. With its densely interconnected manufacturing ecosystem and tight clustering of factories, robotics labs, chipmakers, and AI startups, products can move from concept to full-scale production in weeks instead of months. The city’s expertise in electronics and robotics means businesses can integrate AI features like voice assistants, generative storytelling, emotional recognition, and vision-based interactivity into toys with minimal cost.
Even with tariff uncertainties, Shenzhen maintains an edge over the West, where manufacturing is fragmented and slower. Mature domestic AI models and robotics breakthroughs are collectively injecting momentum into Shenzhen’s smart toy industry.
Haivivi’s BubblePal
The Shenzhen startup Haivivi was among the first to integrate large language models (LLMs) into toys.
The company, established in 2021, has sold more than 200,000 of its BubbelPal AI companions just a year after bringing them to market. Priced at $99, the compact attachment clips onto plush toys to turn them into interactive and intelligent companions.
The small, round wearable offers roleplay, multilingual chats, collaborative storytelling, and personalized learning via what Haivivi calls “bionic memory.” That means it can remember context, user preferences, and interaction history, similar to how a human builds relationships over time.
According to Sohu, Haivivi is accelerating production using $28 million it recently secured in Series A funding.
Intellifusion’s DrLookAI
Intellifusion, a Shenzhen firm founded in 2014 that develops AI chips and algorithms for computer vision, launched a sub-brand focused on interactive toys last year.
Dr.LookAI has already brought its first product to market: a handheld AI-powered learning camera for kids. Children can point the camera at objects, animals, and plants to learn about them instantly, using the same AI visual recognition tech that Intellifusion integrates into video analytics, robotics, and intelligent hardware applications.
According to its developers, the smart camera recognizes nearly 5,000 categories and 2.3 million species using multimodal AI models. Priced around $100, the cameras are consistently ranked among the Top 10 best sellers in the toy category on Douyin, China’s TikTok.
An AI plush toy is expected to launch imminently.
Ropet’s AI Pets
Ropet, a Hong Kong-based company with deep ties to Shenzhen, debuted its AI-powered robotic pets at CES 2025 in Las Vegas.
The startup, launched in 2021, crushed its crowdfunding target on Kickstarter, raising more $200,000 from more than 900 backers. They started shipping units by March 2025.
The plush, warm-to-the-touch robots have vision sensors for facial recognition and mood-sensing. The creation adapts its emotional responsiveness over time with its ChatGPT-based conversational engine.
Kickstarter pricing was $169, while current pricing starts around $300. According to the Global Times, Ropet secured around 10,000 preorders within a month of its launch during crowdfunding, with most demand coming from overseas markets.
X-Origin’s Yonbo
Meanwhile, the Shenzhen-based robotics startup X-Origin is targeting a high-end market with its Yonbo AI companion robot.
The compact, wheeled bot supports local speech recognition with cloud-based ChatGPT processing. Its movements are controlled by a wristband, while its four microphones and high-resolution camera facilitate voice and visual emotional sensing. Designed for families with young children, Yonbo is marketed as an educational and mental health support pal.
X-Origin, also known as Xuanyuan Technology, launched a Kickstarter campaign in late 2024, quickly attracting widespread attention and raising more than $2 million in pledges. However, the campaign was unexpectedly suspended by Kickstarter, triggered by suspected malicious activity involving fake pledges and fishy accounts. X-Origin disputes the suspension and has pivoted to alternative sales channels like Amazon and Shopify.
Early bird pricing was around $400, but retail pricing is $899. The company says it’s already achieved mass production and has gotten more than 8,000 preorders.
Xinditai’s Panda Robots
Long-established manufacturers from Shenzhen are also getting into the AI toy game.
Shenzhen Xinditai Electronics, founded back in 2001, is mass producing a robotic panda that can hold real-time conversations, recognize emotions, and respond to voice commands and gestures.
Pricing starts around $70.
Future of Embodied AI
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