However, in the face of changing consumer behavior and demands, the AI-powered toy industry is experiencing significant transformation, and smart toys that offer interactive experiences to children are gaining immense popularity as parents wish to buy toys that help their children learn and develop skills while playing. The AI Toy Market is currently growing at a significant rate owing to the increased use of AI-enabled educational applications, conversational robotics, STEM-learning toys, and IoT and cloud integration, among others.
According to SNS Insider, the market size of the Smart AI Toy Market stood at USD 18.52 billion in 2025 and is expected to grow up to USD 55.23 billion by 2035, marking a Compound Annual Growth Rate (CAGR) of 11.85% during the period 2026-2035, primarily driven by the rising need for interactive and educational toys, NLP and machine learning technologies, STEM learning toys, voice-activated toys, Internet of Things-connected toys, and emotional companion robots.
Leading Companies in the Global Smart AI Toy Industry:
1. LEGO Group
The company offers AI-enabled robotic building blocks, STEM learning systems that are programmable, and digital learning platforms embedded with digital coding and smart sensor technology. Among its offerings include LEGO education robotics, AI-enabled coding kits, and learning ecosystems that can be utilized both by students at home or in schools. As of 2025, the firm further improved upon its LEGO education ecosystem by enabling AI-enabled coding and robotics, thus gaining a stronger foothold in the Smart AI Toys market segment.
2. Mattel Inc.
Among the leading companies that produce artificial intelligence-enabled toys, Mattel Inc. develops toys, learnable devices, games, and smart companions for their well-known brands like Barbie and Hot Wheels. Conversational AI, personalized learning, and apps-connected toys characterize the brand’s core. Mattel collaborated with the leading organization of Generative AI, namely OpenAI, in 2025 to introduce generative AI to its future toy products.
3. Hasbro Inc.
Hasbro Inc. offers toys integrated with AI technology, game products which connect to apps, storytelling software which is digitized, and toys which have a voice-enabled capability. The company has merged the use of physical toys with digital interaction through AI for use by kids and their families. In 2025, Hasbro incorporated the use of AI within their toys by improving their app connection feature and digital interaction.
4. UBTECH Robotics
The main products offered by UBTECH Robotics include AI humanoid robots, programming robots, and smart STEM education learning robots intended for use in both educational institutions and home settings. The product range provided by the company includes programming robots, AI learning robots, and interactive voice robots intended to be used for learning purposes. Recently, the company has intensified its efforts in terms of making global educational and AI robotic advancements.
5. Sony Group Corporation
Sony Group Corporation has been providing robots equipped with artificial intelligence to serve as company pets and provide smart entertainment to users. It features robotic companions and emotionally interactive technology that comes in the form of entertainment products that are powered by artificial intelligence, sensors, and machine learning. The latest development of Sony includes the enhancement of emotional recognition technology, behavioral learning, and adaptive communication technology, making it more appealing in the smart companion market.
6. VTech Holdings Ltd.
VTech Holdings Ltd is engaged in the manufacturing of electronic educational toys, AI educational tablets, computer programming software, and other interactive smart learning devices for kids. The emphasis of VTech lies in providing an affordable and effective educational solution through AI technology that combines voice recognition and app integration. In addition, VTech recently added value to its smart learning device range by introducing improved versions of its educational toys with multi-language capability and learning customization features.
7. Miko (Emotix)
Miko (Emotix) is an enterprise that creates intelligent tutoring systems through the development of robots, which can assist learning through conversations, and emotionally interactive smart toys for children. Miko’s product range involves AI tutors, voice-activated robots, and personalized learning assistants using NLP and emotional intelligence features. The company has recently enhanced its learning AI system by incorporating advanced conversational AI, multi-lingual education, and behavioral learning capabilities.
How Smart AI Toys are Transforming Learning and Child Development?
In the coming years, the Smart AI Toys Market will witness high growth on account of increasing use of AI technology in the fields of education, entertainment, and development of children. With growing use of conversational AI, emotional recognition technology, Internet of Things connectivity, and cloud learning technologies, competition in the market will remain intense in the upcoming years. Educational institutes and parents have begun giving importance to personalized learning solutions that offer entertainment along with education, especially in the field of STEM education and language education.
On the other hand, improvements in machine learning, edge computing, and computer vision technologies are anticipated to boost the responsiveness, adaptability, and emotional intelligence of AI toys in the future. Firms that are focusing their efforts in creating products that are multilingual, therapy-based, and education-based will have a great competitive edge in the future.
