The rapid adoption of conversational AI among adolescents has sparked growing debate about its implications for development and well-being. This article applies a Self-Determination Theory lens to explore how and under which conditions adolescents’ conversational AI usage supports or frustrates their basic psychological needs for competence, relatedness, and autonomy. Conversational AI may enhance competence through learning assistance, relatedness through emotional and relational support, and autonomy through increased independence. At the same time, it may also promote the risk of superficial competence, displace human relationships, and constrain authentic autonomy. Overall, the role conversational AI plays in adolescents’ development is unlikely to be universally positive or negative for all adolescents, but instead depends on how, why, and in which context these technologies are used, highlighting the need for nuanced research and developmentally sensitive design.