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Sitting in his company's small Midtown Manhattan office, JP Benini speaks casually into his smartphone. "Hello!"

Suddenly, a fluorescent-green plastic dinosaur sitting on the table in front of him springs to life. "Hi JP, what's up?" it says in a gravelly cartoonish voice.

"You sound like Cookie Monster," Benini says.

"What's wrong with that?" the dinosaur quips. "Cookies are delicious."

That dinosaur looks simple, but there are years of work and millions of dollars in research spending behind its responses. The prototype was created by Elemental Path, which Benini co-founded a year ago, and which uses IBM's Watson cognitive-computing platform -- famous for its appearance on "Jeopardy!" in 2011 -- to power its question-and-answer dialogue. Benini's company plans to start selling the Internet-connected dinosaurs, his company's first product, under its CogniToys brand in November for $100 each.

Benini's hope is that the dinosaur helps pioneer a new kind of educational and entertainment toy for children that can answer thousands of questions, teach math lessons, learn from interactions with its owner and grow along with a child.

"The whole talking-toy arena didn't exist a year ago," Benini says. "You had things like your Teddy Ruxpins from way back when, you had Speak & Spells from even further back, but it was never really interactive. They were never listening to your child -- they were more or less yelling at them."

"We are at sentence one of paragraph one of page one of a very long book here." Oren Jacob, co-founder of ToyTalk

But teaching a computer to converse with people is far from perfect and will take time. On-the-fly language, it turns out, its incredibly hard to teach a machine.

Through his smartphone Benini asks his dinosaur, which he named Doug, how fast a cheetah can run. Doug pauses for about half a minute, staring blankly at its owner. It eventually spits out, "A cheetah can run up to 75 miles per hour."

Chatty robots

Over the past three years, the computer voice assistant has infected millions of electronics, with Apple's Siri, Microsoft's Cortana and Google's Google Now enabling smartphone users to retrieve directions, call friends and schedule meetings. Amazon's Echo speakers include an assistant named Alexa that can play music and answer simple questions.

While these systems are mostly focused on productivity, there are a few new examples of computer voices designed to power toys. Those efforts may take the technology a step further from just answering basic queries to enabling natural-language dialogue and entertainment. It's an early sign of what the future of play -- and, more broadly, human-robot interaction -- may look like.

These efforts also finally bring to the real world the childhood fantasy of chatting with toys, assuming kids want to.

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"We are at sentence one of paragraph one of page one of a very long book here," says Oren Jacob, CEO and co-founder of San Francisco-based ToyTalk. "There's a long way to go to fully put the art of conversation into the hands of our team."

Jacob spent 20 years creating movie animations and graphics at Pixar Animation Studios (creators of "Toy Story," "Up" and "Monsters, Inc."), before starting ToyTalk in 2011. Its mission is to create a new medium of entertainment using interactive computer characters. One of the inspirations for ToyTalk came from his daughter, who asked him why she couldn't talk to her teddy bear. The company already offers a handful of mobile-app-based characters that children can talk to, including an excitable yellow creature named Winston.

"It's not often you get to open up a new field of art as a business," Jacob says. "Having a chance to do that will push a lot of companies."

This fall, ToyTalk will put its speech-recognition and artificial-intelligence platform inside a physical toy for the first time, teaming up with Mattel to create Hello Barbie, a Wi-Fi-connected conversational version of the iconic doll. Hello Barbie is priced at $75. (On its website, Mattel sells most Barbie models for $10 to $25.)

The point of ToyTalk's products, Jacob says, isn't to answer every question someone may have, but to entertain. The longest someone has conversed with one of ToyTalk's character was over four hours, nonstop.

"How cool that we had a kid completely convinced that they were talking to a character live for that long," Jacob says, noting that the time was spent exploring, telling stories and making up poems. "That's just phenomenal."

"There is that other level of interactivity, that expectation, that not just children but people in general can have from their devices." JP Benini, co-founder of Elemental Path

Listen to this

Aside from the difficulty of getting the technology right, interactive toys may face a more fundamental challenge: now that these objects can listen to kids, will parents trust having them around?

Soon after Hello Barbie was introduced to the world in February at a New York toy fair, the advocacy group Campaign for a Commercial-Free Childhood blasted the product. Using terms like "creepy" and "eavesdropping," the group argued that Mattel could analyze children's recordings for financial gain.

Jacob said those claims are false. "Any data we collect from our service is not -- N-O-T -- not used for advertising or marketing purposes," he adds. Parents can listen or share the recordings collected from interactions and delete them if they wish, he says.

Elemental Path has a similar policy. Benini says all data collected is used to improve the toy's interactions and educational value -- it's never used for marketing or advertising, and can be deleted by parents.

While new, Internet-connected toys should already fall under the federal Children's Online Privacy Protection Act, which requires companies to put parents in control of information collected from their young children online.

Even so, those concerns illustrate the time it may take for people to become comfortable with new connected technologies, especially those for children.

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An interactive world

Creepiness concerns aside, the pent-up demand for talking toys seems real.

Elemental Path went to Kickstarter to raise funds for its dinosaur, hoping to bring in $50,000. The company met that goal in the first 18 hours of its campaign and went on to presell 2,600 toys, raising $275,000. Elemental Path raised an additional $1 million in seed funding from friends and angel investors in March to bring its toy to market.

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The company hopes it can take the system it built for the dinosaur and design more toys itself, as well as license the tech to other toymakers. It also hopes to make the toys available for more age groups. (For now, the dinosaur is designed to appeal to children ages 4 to 9.)

Beyond that, Benini said all devices could become more aware of people's emotions and respond appropriately -- at the simplest level, that could mean helping to cut down on frustrating interactions with automated call services.

That kind of a world may be a boon for AI computing systems like IBM's Watson, which is being used to analyze data in fields including medicine and finance but isn't present in most people's lives (aside from that appearance on the "Jeopardy!" game show).

"There is that other level of interactivity, that expectation, that not just children but people in general can have from their devices," Benini says. "We're seeing the beginnings of that...making the world around you interactive, but intelligently interactive."