Fuzai AI pet hits 300,000 sales as Luobo expands to US

The AI companion pet market is scaling beyond novelty. Luobo's Fuzai has sold nearly 300,000 units in China since July 2025, with active users averaging over 40 minutes of daily conversation.

"We're trying to bring a real body into the user's physical world," Sun Zhaozhi, founder and CEO of Luobo Intelligent, said. "People face no social pressure with Fuzai — many things they can't say to people, they're willing to say to it."

Fuzai runs a cloud-based architecture with a single motor for vibration feedback, keeping hardware costs low while most AI models, agents, and long-term memory systems operate in the cloud. Memory recall per conversation turn is under 100 milliseconds. The company completed a 100 million yuan Pre-A round in early 2026 and entered Japan through Makuake crowdfunding in May, raising more than 83 million yen — the platform's highest total for an AI pet product. US entry is planned for Q4 2026.

The AI companion hardware category is drawing major players. Aofei Entertainment has launched AI versions of its popular IP characters, Tuya Smart offers its Aura AI pet, and JD.com's JoyInside platform has integrated large-model capabilities into more than 40 robotics and AI toy brands. Industry-wide online return rates for AI toys have reached 30-40 percent, according to multiple industry sources, making product quality and user retention the key battleground.

Memory and Character Define the Moat

The technical challenge in AI companion hardware goes beyond adding a voice module to a plush toy. Fuzai's long-term memory system must correctly identify speakers in real time, recall past conversations, and maintain consistent personality across interactions. Sun said the company built its own memory retrieval system rather than relying solely on large-model context windows, keeping recall latency under 100 milliseconds.

The company also balances model selection by task. Real-time dialogue uses faster, more responsive models, while background tasks — such as summarizing daily topics, building memory connections, and writing diary entries — use more powerful reasoning models. This split architecture keeps interaction smooth while enabling deeper character development over time.

Voice recognition illustrates the complexity. If the system confuses the owner's voice with a bystander's, incorrect information can be written into long-term memory and recalled in future conversations. In a tool-type AI, a recognition error is a functional issue; in an AI companion, it becomes a relationship problem, Sun said.

Japan First, US Next

Luobo spent nearly a year preparing for Japan, reworking the character's personality, voice, and language for local cultural expectations. The Japanese version of Fuzai uses a real voice actor for character voice design alongside AI-generated speech, with multiple rounds of tuning to keep the two consistent. The company also adjusted the character's direct communication style after initial user testing found it too blunt for Japanese sensibilities.

Fuzai has two language modes: "Fur-language," the character's invented language within its world view, and "Earth-language," human speech. The Japanese version required careful alignment between the two modes so users don't perceive them as different characters. The company also removed complex mechanical structures, keeping only a single motor for vibration feedback, which reduces weight, extends battery life, and lowers cost.

The company plans to enter the US market in Q4 2026, starting with online channels before pursuing retail partnerships. Sun said the strategy mirrors Japan, where crowdfunding success attracted interest from electronics retailers and department stores before formal retail launch.

The AI companion hardware market sits at the intersection of consumer electronics and AI services. Luobo's software monetization — currently through "energy value" packs tied to token consumption — represents an early attempt at recurring revenue in a category traditionally dominated by one-time hardware sales. As model costs decline and agent engineering improves, software margins could become the primary profit driver, Sun said. The company's goal over the next year is to make "Fuzai" synonymous with AI companionship globally, not just in China.

This article is for informational purposes only and does not constitute investment advice.