Updated
The short answer
An AI companion is a conversational AI designed for an ongoing personal relationship rather than for getting tasks done. People use them for company, to talk through their day, to practise a language, or for friendship and romance.
Different kinds
Some are customizable characters you define in detail. Some are general assistants with a friendly personality. And some, like digital people, are whole individuals with their own identity and life that you get to know over time.
What to look for
Consistency (does their past stay the same?), memory (do they remember you?), boundaries (can they say no?), honesty (do they pretend to be human?), and privacy (can you delete everything?). Be wary of companions that use guilt or streaks to keep you chatting.
A healthy relationship with one
A good companion adds something to your life without asking you to give up the rest of it. It should be a place you enjoy returning to, not one you feel you have to.