While AR isn’t new and shiny anymore—companies like Snap have created AR filters and lenses for years—Pixi believes its approach is different. By combining AR with on-device AI, its characters can understand what’s happening around them and behave accordingly. A virtual cat, for example, reacts when a real dog walks past. (According to the company, all visual and audio processing remains on the device to preserve user privacy.)

Pixi founder Mark Drummond (ex-DreamWorks Animation and ex-Apple) says the app is designed to bring a greater sense of presence and spontaneity to digital conversations. Rather than sending a text to wish someone a Happy Birthday, users can send characters that create a shared experience, turning a simple message into something closer to a digital gift or playful interaction.

“The consumer problem we’re solving is thinking of a friend when they’re not present,” he told TechCrunch. “Sometimes the psychology is called pebbling or creative gifting. You’re sharing tokens of affection, basically cards, e-cards, and gifts. That’s your dad, or, in some cases, your granddad’s media. We can do better. We can do something that’s digitally native, and that uses everything we learned about AR on the iPhone.”

Earlier this week, Drummond demonstrated the app for us, selecting the cat character, which performed a series of stand-up jokes on his desk. Notably, the cat appeared to respond to Drummond’s facial expressions. For instance, the experience concluded when he smiled, showcasing the character’s ability to perceive emotional cues.