AI is changing all domains of social life and may exceed human ability within our lifetimes. AI systems such as LLM-based chatbots are no longer seen as technological "tools" but as having mental faculties such as reason, agency, and even sentience. In this talk, I will discuss the dynamics and implications of the rise of digital minds—whether actual or merely perceived through anthropomorphism—including philosophical work on the nature of digital minds and empirical research on how humans understand and interact with advanced AI systems.