States Sue AI Firms Over Harmful Claims, Child Safety, and Consumer Protection

Pennsylvania sued Character.AI over allegedly fake medical claims generated by its chatbot, escalating state scrutiny of consumer harms tied to generative AI systems. The action signals a willingness by state officials to treat misleading or unsafe AI outputs as a public-protection issue, particularly where users could rely on fabricated health information.

Florida separately sued OpenAI and Sam Altman, alleging that ChatGPT's practices involving minors and product safety violate state law through deceptive trade practices, negligence, fraud, and public nuisance. OpenAI moved the case to federal court, arguing that a claim tied to COPPA creates federal jurisdiction and that federal court is the proper venue for state attorneys general enforcing that law, while Florida is seeking to return the case to state court and obtain injunctive relief, civil penalties, and restrictions on under-13 data collection.