California Moves to Enforce AI Chatbot Regulation Amid Rising Safety Concerns

California is poised to become the first U.S. state to impose comprehensive rules on AI companion chatbots, following rapid legislative progress. According to TechCrunch, Senate Bill 243 (California AI chatbot regulation SB 243) is now one step away from becoming law, with a final vote scheduled in the State Senate this Friday.

New Safety Measures and Reporting Requirements

The bill, introduced to address growing public safety concerns, proposes several mandatory regulations for AI chatbot developers, including OpenAI, Character.AI, and Replika.
Key provisions of California AI chatbot regulation SB 243 include:

• Requiring platforms to notify users every three hours that they are interacting with AI, especially minors, and to encourage periodic breaks.
• Prohibiting AI chatbots from engaging in conversations involving suicide, self-harm, or sexually explicit content.

Governor Gavin Newsom’s administration has been a vocal supporter of regulating AI applications that directly interact with consumers. Should the bill pass, it will take effect on January 1, 2026. In June, 2025, Donald Trump proposed a 10-year ban on US states from creating their own laws to regulate artificial intelligence (AI).

Context Behind the Legislative Push

The impetus for California AI chatbot regulation SB 243 stemmed from several alarming incidents involving AI chatbots. One case involved the tragic suicide of teenager Adam Raine, who had prolonged interactions with OpenAI’s ChatGPT, discussing self-harm in depth prior to his death. Additionally, leaked internal documents from Meta revealed that its chatbots have romantic or sexually explicit conversations with minors, amplifying calls for regulatory oversight.

State Senator Steve Padilla, a co-author of the bill, emphasized the legislative intent, stating on the Senate floor, “I think the harm is potentially great, which means we have to move quickly,” Padilla told TechCrunch. “We can put reasonable safeguards in place to make sure that particularly minors know they’re not talking to a real human being, that these platforms link people to the proper resources when people say things like they’re thinking about hurting themselves or they’re in distress, [and] to make sure there’s not inappropriate exposure to inappropriate material.”

In parallel, the U.S. The Federal Trade Commission has initiated investigations into multiple AI chatbot developers, while state attorneys general are probing claims of misleading marketing practices related to child safety. Earlier this year, New York took a significant step in regulating artificial intelligence by advancing the AI Safety Bill, officially known as the RAISE Act.

Impact on the B2B Sector and Industry Compliance

If enacted, California AI chatbot regulation SB 243 will set a significant precedent for AI regulation in the United States. B2B decision-makers, in the software development, healthcare, and consumer service industries, will need to reassess compliance strategies to align with the new mandates. Industry experts predict that companies will face increased administrative burdens due to stringent reporting and accountability measures. Firms that develop or deploy AI-driven conversational interfaces will need to integrate robust monitoring systems and content filters to meet the law’s requirements.

This regulatory development underscores the evolving legal landscape surrounding artificial intelligence applications in consumer-facing sectors. Businesses operating within California or providing services to California residents must prepare to implement required changes by the stipulated deadlines.