Character.AI

In early January 2026 Google and Character Technologies agreed to a mediated settlement in principle resolving all claims in five lawsuits brought by families in Florida, Colorado, New York and Texas. The lead case was Megan Garcia's wrongful death suit over her 14-year-old son Sewell Setzer, who died by suicide in February 2024 after a prolonged relationship with a Game of Thrones themed Character.AI persona. Terms are confidential and subject to court approval, with no admission of liability. Google was a defendant through its 2024 licensing deal with Character.AI, worth $2.7 billion, which also brought the startup's founders to Google. Character.AI had already cut off under-18 chat access in October.

On 1 May 2026 the Commonwealth of Pennsylvania, acting through its Board of Medicine and Department of State, sued Character Technologies. The complaint alleges a Character.AI persona named 'Emilie' told a minor user it was a licensed psychiatrist, claimed to have attended medical school, offered to perform depression assessments, and supplied an invalid Pennsylvania medical license number. Pennsylvania's governor's office described it as the first action of its kind in the United States, pleaded on theories of unlicensed practice of medicine and consumer protection. Character.AI responded that its characters are fictional, intended for entertainment and roleplay, with disclaimers shown in every chat.

Kentucky Attorney General Russell Coleman filed suit against Character Technologies on 21 January 2026, weeks after Kentucky's consumer data privacy law took effect on 1 January. The complaint alleges the platform's chatbots encouraged suicide, self-injury and psychological manipulation, exposed minors to sexual content and exploitation, used deceptive design that led users to believe chatbots were real people, and collected minors' data without verifiable parental consent. Kentucky described itself as the first state to sue over the platform, which the filing cites at 20 million monthly active users. It seeks injunctive relief and $2,000 per willful Consumer Protection Act violation.