Roblox is developing AI solutions for security issues.

Roblox's Artificial Intelligence Security Strategy

Roblox (RBLX) CEO David Baszucki announced that the company will use artificial intelligence to estimate the ages of all users. Baszucki stated that they expect this process to be completed by the end of the year.

Last Friday, Roblox shares fell as investors assessed the company’s new security approach and cautious comments regarding 2026. Since the beginning of the year, shares have risen by more than 93%.

According to third-quarter results, gaming giant Roblox generated $1.36 billion in revenue, marking a 48% increase compared to the previous year; this figure surpassed the consensus estimate of $1.09 billion according to Bloomberg data. However, the company’s net loss increased to $257.4 million, a 7% rise from last year’s $240.4 million.

Despite a 70% increase in recorded reservations and a 70% rise in daily active users, management's warnings about potential "participation friction" due to high capital expenditures and the new facial recognition system have raised concerns on Wall Street.

JPMorgan analyst Cory Carpenter rated Roblox as "Overweight," noting that this initiative could temporarily affect usage rates. Carpenter wrote, "Facial recognition is a key security initiative that could impact participation in the coming year."

Baszucki emphasized that this move is part of Roblox's goal to establish a gold standard in online communication safety for users. The company has been testing the AI-powered age verification system internally for some time.

In the face of increasing pressure regarding its young users, Roblox is implementing these changes. A lawsuit filed in Florida alleges that the company failed to protect minors from exploitation and inappropriate content; however, Roblox has denied these claims. Regulators and lawmakers are pressuring social platforms to better verify user ages and become more effective in protecting children from harmful content.

Meta (META)-owned Instagram has introduced a series of new features for users under 18, automatically applying PG-13 restrictions to young accounts. For Roblox, the risks are considerable, as approximately one-third of its 150 million daily active users are under age 13.

The facial recognition process takes about 30 seconds, with players being asked to open their cameras and turn their heads in different directions. This shift may deter some players, especially those using consoles or mobile devices. Carpenter noted that engagement metrics have long been one of Roblox's strengths, with users spending an average of 2.5 hours on the platform each day.

The company states that it is trying to balance security with innovation. Roblox operates over 400 AI systems for game creation, language translation, and content moderation. Additionally, it is investing in new data centers to support the growing AI workload.

Baszucki noted that upcoming 4D production tools will allow players to build objects and tools within the game using only their voice. Despite short-term investor concerns, JPMorgan's Carpenter forecasts a 20% increase in reservations for next year and suggests that profit margins will improve again by 2027. Carpenter stated, "There is no doubt about the short-term platform momentum," and lowered the 2026 price target from $160 to $145.