Roblox wants to use AI to guess every user’s age, but investors aren’t sure that’s a win

Roblox (RBLX) has a plan to deal with a slew of safety issues: artificial intelligence.

“We’re going to use AI to estimate the age of every single person on Roblox,” CEO David Baszucki told Yahoo Finance’s Opening Bid. “We expect to have this done all by the end of this year.”

Roblox stock slipped on Friday as investors weighed the company’s new safety push alongside cautious comments about 2026 spending. Year to date, shares are up more than 93%.

For the third quarter, the gaming giant reported revenue of $1.36 billion, a 48% year-over-year increase, beating consensus estimates of $1.09 billion, according to Bloomberg data. However, Roblox posted a net loss of $257.4 million, up 7% year over year from $240.4 million.

While bookings surged 70% year over year and daily active users were up 70%, management’s warning about higher capital expenditures and potential “engagement friction” from the new facial estimation system spooked Wall Street.

JPMorgan analyst Cory Carpenter, who rates Roblox Overweight, wrote that the initiative could temporarily dent usage metrics as players adjust.

“Facial estimation is the primary safety initiative that could impact engagement next year,” Carpenter said in a note. “Mgmt thinks it’s prudent to expect some initial friction, but it’s hard to quantify at this point.”

Baszucki framed the move as part of Roblox’s “gold standard for communication safety on the internet,” placing it alongside other protective features such as heavy text filtering and bans on image or video sharing in chats. He said the company has been testing the AI-driven age verification system internally for some time.

“It’s really quite elegant,” Baszucki said. “I’m very optimistic that any friction that we might see from this is actually beneficial to us in the long run.”

The changes come as Roblox faces increasing scrutiny over the safety of its younger users. A recent lawsuit filed in Florida accused the company of failing to protect minors from exploitation and inappropriate content — allegations Roblox has denied. Regulators and lawmakers have also stepped up pressure on social platforms to better verify users’ ages and shield children from harmful content.

Meta (META)-owned Instagram has rolled out a number of features for users under 18, automatically applying PG-13 restrictions to teen accounts.

For Roblox, which counts roughly one third of its 150 million daily active users as under 13, the stakes are particularly high. The facial estimation process is said to take about 30 seconds and requires a player to briefly turn on their camera and move their head in different directions.

The shift could alienate some players, especially those using consoles or mobile devices, where the verification process may be clunkier. Carpenter notes that engagement metrics have long been Roblox’s strength, as users spend an average of 2.5 hours per day on the platform.

The company insists it’s balancing safety with innovation. Roblox operates more than 400 AI systems, including tools for generative game creation, language translation, and content moderation. It’s also investing in new infrastructure, including data centers to support its growing AI workload.

Baszucki said upcoming 4D generative creation tools will allow players to build items and vehicles in-game simply by talking about them.

Despite short-term investor jitters, JPMorgan’s Carpenter remains upbeat, projecting 20% growth in bookings next year and margin leverage resuming in 2027. “There’s no debate around the near-term platform momentum,” he wrote, even as he trimmed his 2026 price target to $145 from $160.

Francisco Velasquez is a Reporter at Yahoo Finance. Follow him on LinkedIn, X, and Instagram. Story tips? Email him at francisco.velasquez@yahooinc.com.

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