Disclaimer: today’s episode touches on NSFW topics. There’s no graphic content or explicit language, but we wouldn’t recommend blasting this in work environments. Product website: usewhisper.me For over 20 years it’s been an open secret that porn drives many new consumer technology innovations, from VHS and Pay-per-view to VR and the Internet. It’s been no different in AI - many of the most elite Stable Diffusion and Llama enjoyers and merging/prompting/PEFT techniques were born in the depths of subreddits and 4chan boards affectionately descibed by friend of the pod as The Waifu Research Department. However this topic is very under-covered in mainstream AI media because of its taboo nature. That changes today, thanks to our new guest Jesse Silver. The AI Waifu Explosion In 2023, the Valley’s worst kept secret was how much the growth and incredible retention of products like Character.ai & co was being boosted by “ai waifus” (not sure what the “husband” equivalent is, but those too!). And we can look at subreddit growth as a proxy for the general category explosion (10x’ed in the last 8 months of 2023): While all the B2B founders were trying to get models to return JSON, the consumer applications made these chatbots extremely engaging and figured out how to make them follow their instructions and “personas” very well, with the greatest level of scrutiny and most demanding long context requirements. Some of them, like Replika, make over $50M/year in revenue, and this is -after- their controversial update deprecating Erotic Roleplay (ERP). A couple of days ago, OpenAI announced GPT-4o (see our AI News recap) and the live voice demos were clearly inspired by the movie Her. The Latent Space Discord did a watch party and both there and on X a ton of folks were joking at how flirtatious the model was, which to be fair was disturbing to many:

From Waifus to Fan Platforms Where Waifus are known by human users to be explicitly AI chatbots, the other, much more challenging end of the NSFW AI market is run by AIs successfully (plausibly) emulating a specific human personality for chat and ecommerce. You might have heard of fan platforms like OnlyFans. Users can pay for a subscription to a creator to get access to private content, similarly to Patreon and the likes, but without any NSFW restrictions or any other content policies. In 2023, OnlyFans had over $1.1B of revenue (on $5.6b of GMV). The status quo today is that a lot of the creators outsource their chatting with fans to teams in the Philippines and other lower cost countries for ~$3/hr + 5% commission, but with very poor quality - most creators have fired multiple teams for poor service. Today’s episode is with Jesse Silver; along with his co-founder Adam Scrivener, they run a SaaS platform that helps creators from fan platforms build AI chatbots for their fans to chat with, including selling from an inventory of digital content. Some users generate over $200,000/mo in revenue. We talked a lot about their tech stack, why you need a state machine to successfully run multi-thousand-turn conversations, how they develop prompts and fine-tune models with DSPy, the NSFW limitations of commercial models, but one of the most interesting points is that often users know that they are not talking to a person, but choose to ignore it. As Jesse put it, the job of the chatbot is “keep their disbelief suspended”. There’s real money at stake (selling high priced content, at hundreds of dollars per day per customer). In December the story of the $1 Chevy Tahoe went viral due to a poorly implemented chatbot: Now imagine having to run ecommerce chatbots for a potentially $1-4b total addressable market. That’s what these NSFW AI pioneers are already doing today.