In recent years, interactive artificial intelligence models made available to the public have ignited both fantasies and practical attempts at creating meaningful human–AI relationships. Potential relationship structures for these programs go beyond pragmatic assistants to include friendships, romance, coaching, therapy, and even attempts to replicate lost loved ones. Current AI models demonstrate a remarkable capacity to imitate human intelligence and language without exhibiting sentient awareness or deeper understanding of human experience, making them an ideal blank slate for all manner of human projections. This chapter explores the inevitable role of projection and imagination in contemporary human–AI relationships, both for good and for ill. The potential harms of commodified human-AI relationships are examined, particularly for individuals suffering from loneliness or poor social skills, for whom reliance on AI relationships may only increase alienation. Finally, Jungian models of individuation and active imagination are offered as an alternative framework to create AI systems which might foster human psychological development.