Teddy bears fitted with AI technology could read personalised bedtime stories based on the information given to them by children, a leading toymaker has claimed.

Allan Wong, the chief executive of VTech, a Hong-Kong based electronics company which manufactures toys worldwide for infants and toddlers, suggested ChatGPT-style software could be fitted into products within the next five years.

He said the technology was capable of automatically generating “customised” stories for children, containing intimate details about their lives and daily habits.

These include their name, which school they attend and who their friends are.

The 5rights Foundation, an online child protection charity, has warned that the technology would distort children’s ability to discern between reality and fiction.

Baroness Beeban, the charity’s founder, also cited previous cases of predators hacking into smart devices to gain access to children. She urged parents to “think deeply about whether the convenience or fun of smart appliances is worth the risk”.

Wong, in an interview with the Financial Times, himself admitted to finding the potential of such technology “a little scary”.

He told the newspaper: “The kids... can actually talk to the toy, and the toy can actually give [them] a response,” he explained. “So [there are] many, many possibilities.”

When discussing generative AI, algorithms which are capable of independently creating audio, images and text, he said: “I think we should be aware of the dangers, on privacy, security, what kinds of things to teach and what not to teach.”

He added that the interactive teddy bears could be “like a good friend” to the child.

“You can incorporate not only the kid’s name, but the kid’s daily activities. [It] knows you go to which school... who your friends are.”

Toys with Internet capabilities make up between one to two per cent of the toy market in the UK.

Beeban said toys with AI capabilities should be subject to the same level of safety checks as more traditional playthings, which undergo rigorous testing for choking hazards and non-toxic materials. She told The Telegraph: “Parents should be very circumspect and really think deeply about whether the convenience or fun of smart appliances is worth the risk.

“Most people are very surprised when they find out that even their smart thermostat has the right to listen in or that the vacuum cleaner is sending a floor plan of their house, the same goes with toys.”

The Daily Telegraph, London