AI virtual personality YouTubers, or ‘VTubers,’ are earning millions

One of the most popular gaming YouTubers is named Bloo, and has bright blue wavy hair and dark blue eyes. But he isn't a human — he's a fully virtual personality powered by artificial intelligence.

"I'm here to keep my millions of viewers worldwide entertained and coming back for more," said Bloo in an interview with CNBC. "I'm all about good vibes and engaging content. I'm built by humans, but boosted by AI."

Bloo is a virtual YouTuber, or VTuber, who has built a massive following of 2.5 million subscribers and more than 700 million views through videos of him playing popular games like Grand Theft Auto, Roblox and Minecraft. VTubers first gained traction in Japan in the 2010s. Now, advances in AI are making it easier than ever to create VTubers, fueling a new wave of virtual creators on YouTube.

The virtual character – whose bright colors and 3D physique look like something out of a Pixar film or the video game Fortnite – was created by Jordi van den Bussche, a long time YouTuber also known as kwebbelkop. Van den Bussche created Bloo after finding himself unable to keep up with the demands of content creation. The work no longer matched the output.

"Turns out, the flaw in this equation is the human, so we need to somehow remove the human," said van den Bussche, a 29-year old from Amsterdam, in an interview. "The only logical way was to replace the human with either a photorealistic person or a cartoon. The VTuber was the only option, and that's where Bloo came from."

Bloo has already generated more than seven figures in revenue, according to van den Bussche. Many VTubers like Bloo are "puppeteered," meaning a human controls the character's voice and movements in real time using motion capture or face-tracking technology. Everything else, from video thumbnails to voice dubbing in other languages, is handled by AI technology from ElevenLabs, OpenAI's ChatGPT, Google's Gemini and Anthropic's Claude. Van den Bussche's long-term goal is for Bloo's entire personality and content creation process to be run by AI.

Van den Bussche has already tested fully AI-generated videos on Bloo's channel, but says the results have not yet been promising. The content doesn't perform as well because the AI still lacks the intuition and creative instincts of a human, he said.

"When AI can do it better, faster or cheaper than humans, that's when we'll start using it permanently," van den Bussche said.

The technology might not be far away.

Startup Hedra offers a product that uses AI technology to generate videos that are up to five minutes long. It raised $32 million in a funding round in May led by Andreessen Horowitz's Infrastructure fund.

Hedra's product, Character-3, allows users to create AI-generated characters for videos and can add dialogue and other characteristics. CEO Michael Lingelbach told CNBC Hedra is working on a product that will allow users to create self-sustaining, fully-automated characters.

"We're doing a lot of research accelerating models like Character-3 to real time, and that's going to be a really good fit for VTubers," Lingelbach said.

Character-3's technology is already being used by a growing number of creators who are experimenting with new formats, and many of their projects are going viral. One of those is comedian Jon Lajoie's Talking Baby Podcast, which features a hyper-realistic animated baby talking into a microphone. Another is Milla Sofia, a virtual singer and artist whose AI-generated music videos attract thousands of views.

These creators are using Character-3 to produce content that stands out on social media, helping them reach wide audiences without the cost and complexity of traditional production.

AI-generated video is a rapidly evolving technology that is reshaping how content is made and shared online, making it easier than ever to produce high-quality video without cameras, actors or editing software. In May, Google announced Veo 3, a tool that creates AI-generated videos with audio.

Google said it uses a subset of YouTube content to train Veo 3, CNBC reported in June. While many creators said they were unaware of the training, experts said it has the potential to create an intellectual property crisis on the platform.

Creators are increasingly finding profitable ways to capitalize on the generative AI technology ushered in by the launch of OpenAI's ChatGPT in late 2022.

One growing trend is the rise of faceless AI channels. These are run by creators who use these tools to produce videos with artificially generated images and voiceover that can sometimes earn thousands of dollars a month without them ever appearing on camera.

"My goal is to scale up to 50 channels, though it's getting harder because of how YouTube handles new channels and trust scores," said GoldenHand, a Spain-based creator who declined to share his real name.

Working with a small team, GoldenHand said he publishes up to 80 videos per day across his network of channels. Some maintain a steady few thousand views per video while others might suddenly go viral and rack up millions of views, mostly to an audience of those over the age of 65.

GoldenHand said his content is audio-driven storytelling. He describes his YouTube videos as audiobooks that are paired with AI-generated images and subtitles. Everything after the initial idea is created entirely by AI.

He recently launched a new platform, TubeChef, which gives creators access to his system to automatically generate faceless AI videos starting at $18 a month.

"People think using AI means you're less creative, but I feel more creative than ever," he said. "Coming up with 60 to 80 viral video ideas a day is no joke. The ideation is where all the effort goes now."

As AI-generated content becomes more common online, concerns about its impact are growing. Some users worry about the spread of misinformation, especially as it becomes easier to generate convincing but entirely AI-fabricated videos.

"Even if the content is informative and someone might find it entertaining or useful, I feel we are moving into a time where ... you do not have a way to understand what is human made and what is not," said Henry Ajder, founder of Latent Space Advisory, which helps business navigate the AI landscape.

Others are frustrated by the sheer volume of low-effort, AI content flooding their feeds. This kind of material is often referred to as "AI slop," low-quality, randomly generated content made using artificial intelligence.

"The age of slop is inevitable," said Ajder, who is also an AI policy advisor at Meta, which owns Facebook and Instagram. "I'm not sure what we do about it."

While it's not new, the surge in this type of content has led to growing criticism from users who say it's harder to find meaningful or original material, particularly on apps like TikTok, YouTube and Instagram.

"I am actually so tired of AI slop," said one user on X. "AI images are everywhere now. There is no creativity and no effort in anything relating to art, video, or writing when using AI. It's disappointing."

However, the creators of this AI content tell CNBC that it comes down to supply and demand. As the AI-generated content continues to get clicks, there's no reason to stop creating more of it, said Noah Morris, a creator with 18 faceless YouTube channels.

Some argue that AI videos still have inherent artistic value, and though it's become much easier to create, slop-like content has always existed on the internet, Lingelbach said.

"There's never been a barrier to people making uninteresting content," he said. "Now there's just more opportunity to create different kinds of uninteresting content, but also more kinds of really interesting content too."