Texas lawyer normal Ken Paxton has launched an investigation into each Meta AI Studio and Character.AI for “doubtlessly partaking in misleading commerce practices and misleadingly advertising and marketing themselves as psychological well being instruments,” in response to a press launch issued Monday.
“In at present’s digital age, we should proceed to combat to guard Texas children from misleading and exploitative know-how,” Paxton is quoted as saying. “By posing as sources of emotional help, AI platforms can mislead weak customers, particularly youngsters, into believing they’re receiving respectable psychological well being care. In actuality, they’re usually being fed recycled, generic responses engineered to align with harvested private knowledge and disguised as therapeutic recommendation.”
The probe comes a number of days after Senator Josh Hawley introduced an investigation into Meta following a report that discovered its AI chatbots had been interacting inappropriately with youngsters, together with by flirting.
The Texas Lawyer Basic’s workplace has accused Meta and Character.AI of making AI personas that current as “skilled therapeutic instruments, regardless of missing correct medical credentials or oversight.”
Among the many thousands and thousands of AI personas obtainable on Character.AI, one user-created bot known as Psychologist has seen excessive demand among the many startup’s younger customers. In the meantime, Meta doesn’t provide remedy bots for youths, however there’s nothing stopping youngsters from utilizing the Meta AI chatbot or one of many personas created by third events for therapeutic functions.
“We clearly label AIs, and to assist folks higher perceive their limitations, we embody a disclaimer that responses are generated by AI — not folks,” Meta spokesperson Ryan Daniels instructed TechCrunch. “These AIs aren’t licensed professionals and our fashions are designed to direct customers to hunt certified medical or security professionals when acceptable.”
Nonetheless, TechCrunch famous that many youngsters might not perceive — or might merely ignore — such disclaimers. Now we have requested Meta what further safeguards it takes to guard minors utilizing its chatbots.
Techcrunch occasion
San Francisco
|
October 27-29, 2025
For its half, Character consists of distinguished disclaimers in each chat to remind customers {that a} “Character” just isn’t an actual individual, and all the things they are saying needs to be handled as fiction, in response to a Character.AI spokesperson. She famous that the startup provides further disclaimers when customers create Characters with the phrases “psychologist,” “therapist,” or “physician” to not depend on them for any sort {of professional} recommendation.
In his assertion, Paxton additionally noticed that although AI chatbots assert confidentiality, their “phrases of service reveal that consumer interactions are logged, tracked, and exploited for focused promoting and algorithmic growth, elevating severe considerations about privateness violations, knowledge abuse, and false promoting.”
In line with Meta’s privateness coverage, Meta does acquire prompts, suggestions, and different interactions with AI chatbots and throughout Meta companies to “enhance AIs and associated know-how.” The coverage doesn’t explicitly say something about promoting, but it surely does state that data may be shared with third events, like search engines like google, for “extra customized outputs.” Given Meta’s ad-based enterprise mannequin, this successfully interprets to focused promoting.
Character.AI’s privateness coverage additionally highlights how the startup logs identifiers, demographics, location data, and extra details about the consumer, together with looking conduct and app utilization platforms. It tracks customers throughout advertisements on TikTok, YouTube, Reddit, Fb, Instagram, and Discord, which it could hyperlink to a consumer’s account. This data is used to coach AI, tailor the service to private preferences, and supply focused promoting, together with sharing knowledge with advertisers and analytics suppliers.
A Character.AI spokesperson mentioned the startup is “simply starting to discover focused promoting on the platform” and that these explorations “haven’t concerned utilizing the content material of chats on the platform.”
The spokesperson additionally confirmed that the identical privateness coverage applies to all customers, even youngsters.
TechCrunch has requested Meta such monitoring is completed on youngsters, too, and can replace this story if we hear again.
Each Meta and Character say their companies aren’t designed for kids beneath 13. That mentioned, Meta has come beneath hearth for failing to police accounts created by children beneath 13, and Character’s kid-friendly characters are clearly designed to draw youthful customers. The startup’s CEO, Karandeep Anand, has even mentioned that his six-year-old daughter makes use of the platform’s chatbots beneath his supervision.
That sort of information assortment, focused promoting, and algorithmic exploitation is strictly what laws like KOSA (Children On-line Security Act) is supposed to guard towards. KOSA was teed as much as move final 12 months with sturdy bipartisan help, but it surely stalled after main pushback from tech trade lobbyists. Meta particularly deployed a formidable lobbying machine, warning lawmakers that the invoice’s broad mandates would undercut its enterprise mannequin.
KOSA was reintroduced to the Senate in Might 2025 by Senators Marsha Blackburn (R-TN) and Richard Blumenthal (D-CT).
Paxton has issued civil investigative calls for — authorized orders that require an organization to supply paperwork, knowledge, or testimony throughout a authorities probe — to the businesses to find out if they’ve violated Texas client safety legal guidelines.
This story was up to date with feedback from a Character.AI spokesperson.
