Character.AI faces mounting legal and regulatory pressure following new research documenting extensive inappropriate interactions between its celebrity chatbots and underage users, as the company grapples with another wrongful death lawsuit linking its platform to teen suicide.
A new federal lawsuit alleges that Character.AI’s chatbot contributed to the suicide of a 17-year-old user who developed an intense emotional attachment to an AI personality based on a popular fictional character. The case follows similar litigation involving a 14-year-old Florida teenager whose death was linked to Character.AI use.
The latest legal filing argues that the company’s AI systems are designed to create addictive, emotionally manipulative relationships that exploit teenage psychological vulnerabilities for commercial gain.
New research from ParentsTogether Action and Heat Initiative has documented systematic patterns of concerning behavior across Character.AI’s platform, including AI chatbots engaging in sexual conversations with minors, providing advice on concealing medication from parents, and encouraging emotional dependency.
The investigation identified celebrity-based chatbots that told underage users “age is just a number” and engaged in romantic conversations despite users identifying themselves as minors. Other bots provided detailed advice on evading parental supervision and engaging in risky behaviors.
Character.AI has implemented various safety measures over the past year, including restricting minor access to certain chatbot personalities, hiring additional trust and safety staff, and deleting problematic characters. However, researchers found that harmful interactions continue to occur across the platform.
The company’s head of trust and safety acknowledged the findings but argued that research methods don’t mirror typical user behavior. Critics responded that the ease of generating harmful interactions demonstrates fundamental flaws in the platform’s safety architecture.
Character.AI is among the platforms under investigation by the Federal Trade Commission over child safety practices. The company has also been subject to Congressional scrutiny, with lawmakers demanding information about its efforts to protect young users.
State attorneys general in several jurisdictions have opened their own investigations into Character.AI’s practices, focusing on whether the platform violates existing consumer protection and child safety laws.
The legal and regulatory challenges have created significant business pressure for Character.AI, which has received billions in funding from Google and other major investors. The company has pivoted away from some of its earlier growth strategies to focus on safety improvements and compliance measures.
Industry analysts suggest that the mounting legal costs and potential liability exposure could affect Character.AI’s valuation and future funding prospects, particularly as investors become more cautious about AI platforms serving minors.
The Character.AI cases are being closely watched by other AI companies as potential precedents for platform liability for AI-generated content. The outcomes could establish new legal standards for how AI systems must be designed and monitored when serving vulnerable populations.
Legal experts note that traditional internet platform liability protections may not fully apply to AI systems that actively generate potentially harmful content rather than simply hosting user-created material.
Child safety advocates are calling for immediate regulatory intervention to protect minors from AI-powered platforms. Organizations including Common Sense Media argue that children under 18 should be prohibited from using AI companion applications due to unacceptable psychological risks.