In this analysis I examine what exposure to AI-generated content means for children aged 3–4, the critical window in which the line between reality and fantasy is formed.

Drawing on Piaget, Vygotsky, Bandura and Bronfenbrenner, I argue that photorealistic artificial images, video and audio disrupt young children's reality-testing, source monitoring and social learning — and I ask what this means for trust, critical thinking and imagination.