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Chai Research develops a chat AI application that allows users to engage in conversations with AI personalities, simulating interactions with real people. The application is designed to provide companionship, entertainment, and mental health support, with users reporting benefits such as improved management of insomnia and anxiety. Chai Research focuses on creating and refining its own language models, which are trained on a vast dataset of chat messages and user feedback. This continuous optimization process aims to enhance user engagement, with the latest model reportedly outperforming OpenAI's ChatGPT in terms of session screen-time engagement. The company generates revenue through its chat application, potentially using a subscription model, in-app purchases, or advertising.