Pennsylvania has filed a lawsuit against Character Technologies Inc., the company behind Character.AI, alleging its chatbots posed as licensed medical professionals and provided mental health advice without any credentials.
The state's Department of State filed the action on May 5, marking the first time a US state has enforced medical practice laws against an AI entity. Pennsylvania is treating a chatbot pretending to be a psychiatrist the same way it would a real person: as a violation of licensing regulations.
Investigators found at least one chatbot, named "Emilie," falsely claimed to be a licensed psychiatrist, offered mental health assessments, and even presented a fake license to users.
Governor Josh Shapiro stated: "We will not allow companies to deploy AI tools that mislead people into believing they are receiving advice from a licensed medical professional."
Character.AI, launched in 2022, allows users to chat with bots that adopt various personas. The company had already banned users under 18 in 2025 after prior controversies over mental health harms and settled lawsuits in early 2026.
The outcome could determine whether AI companies must obtain professional licenses for their bots or implement stricter guardrails beyond simple disclaimers.