furbies were just the beginning These connected companions could disrupt everything from make-believe to bedtime stories. No wonder some lawmakers want them banned. Sharp Corp.'s conversational AI robots "Poketomo" on display at the Combined Exhibition of Advanced Technologies (Ceatec) in Chiba, Japan, in October 2025. Credit: Kiyoshi Ota/Bloomberg via Getty Images The main antagonist of Toy Story 5 , in theaters this summer, is a green, frog-shaped kids’ tablet named Lilypad, a genius new villain for the beloved Pixar franchise . But if Pixar had its ear to the ground, it might have used an AI kids’ toy instead. AI toys are seemingly everywhere, marketed online as friendly companions to children as young as three, and they’re still a largely unregulated category. It’s easier than ever to spin up an AI companion, thanks to model developer programs and vibe coding . In 2026, they’ve become a go-to trend in cheap trinkets, lining the halls of trade shows like CES , MWC , and Hong Kong’s Toys & Games Fair .…