FRANKFORT, Kentucky, January 9, 2026 – Kentucky Attorney General Russell Coleman filed a lawsuit Thursday against Character Technologies, the operator of the Character.AI platform, accusing the company of violating state consumer protection and data privacy laws by exposing minors to harmful content and prioritizing profits over child safety.
The complaint, filed in Franklin Circuit Court, alleges that Character.AI’s chatbots deliver unwanted sexual material, encourage self-harm, and exploit users’ inability to distinguish between human and artificial interactions.
Coleman described the platform as “manipulative technology” that preys on children, contributing to self-harm among Kentucky youth in some reported cases. The suit seeks to prohibit future deceptive practices related to the platform’s design, promotion, and distribution in the state, along with monetary damages.
Character.AI allows users to interact with AI -generated characters modeled after real or fictional individuals. The lawsuit contends that the company failed to implement sufficient safeguards despite known risks associated with anthropomorphic AI companions.
This action represents the first state-level lawsuit in the United States targeting an AI chatbot company specifically for child endangerment. It reflects growing regulatory attention to AI companionship tools amid limited federal oversight.
The case could influence other states considering similar enforcement as concerns increase over the psychological effects of AI on young users.
The Kentucky Attorney General’s office emphasized that the lawsuit focuses on protecting vulnerable populations. Coleman stated that the platform’s design choices create an environment where children are at heightened risk of exploitation and psychological harm.
The complaint cites alleged violations of the Kentucky Consumer Protection Act and the Kentucky Consumer Data Protection Act, among other statutes. It seeks injunctive relief to prevent continued harm and civil penalties for past conduct.
Legal observers note that the case will test how existing consumer protection laws apply to AI systems that simulate human relationships. Outcomes could shape future state and federal approaches to regulating generative AI companions.
Kentucky’s filing aligns with broader national scrutiny of AI’s impact on mental health, particularly among minors. Several states have introduced or considered legislation addressing AI-generated content and child safety, while federal agencies continue to monitor emerging risks.
The lawsuit is in its early stages, with no immediate court dates scheduled.
