If you think people are concerned with privacy now, an AI that people -kids- are spilling their deepest darkest secrets to will really creep us out.

It's probably best left to a third party to skin the Google assistant with soft skills. A small startup can afford to gamble on these things. Google (or Viv, Facebook, Cortana et al) need only provide the underlying capability, in such a way that they can wash their hands of it should it invoke a public backlash.

Just so long as they're collecting the data they need to ultimately know you better than you know yourself.