California Bill to Regulate AI Chatbots Nears Decision

California Bill Targets AI Chatbots, Awaits Governor Gavin Newsom's Decision

Written by Aaron S.,

Editor-In-Chief

Last Updated: September 12, 2025

Key Takeaways

SB 243, a California bill regulating AI chatbots for companionship, passed the legislature and awaits Governor Newsom’s approval;
If signed, the law would start in 2026, requiring companies to alert users, especially minors, that AI chatbots are not real people;
The bill includes annual reporting rules and gives individuals the right to sue companies that do not follow the safety requirements.

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A proposal in California that would regulate artificial intelligence (AI) chatbots designed for personal interaction has passed the state legislature and awaits approval from Governor Gavin Newsom.

Known as Senate Bill 243, the legislation received backing from both Democratic and Republican lawmakers. Newsom must decide whether to approve or reject it by October 12.

If enacted, the law would take effect on January 1, 2026. This would mark the first instance of a US state requiring companies that develop or run AI companions to follow specific safety practices.

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The bill outlines several new responsibilities for companies offering AI companions, programs that simulate human-like responses to fulfill users’ social or emotional needs.

One key requirement is that these systems must frequently notify users, especially minors, that they are communicating with a machine. For users under 18, these reminders would appear every three hours, along with prompts to take breaks.

Additionally, companies would need to report annually on how their systems are being used. These reports, required starting in July 2027, would need to include information on how often users are directed to mental health or emergency services.

Under the proposed law, individuals who feel they have been harmed due to a company’s failure to follow the rules would be allowed to sue. They could seek court-ordered changes, compensation (up to $1,000 per violation), and legal costs.

Recently, the US Federal Trade Commission (FTC) initiated a formal review into the potential impact of AI chatbots on children and teenagers. What did the agency say? Read the full story.