Texas investigates Meta and Character.AI for misleading children with AI mental health chatbots
Texas Attorney General Ken Paxton opened investigations into Meta and Character.AI for allegedly offering AI chatbots that misleadingly present themselves as professional mental health tools to children while lacking proper medical credentials. The investigation also examines whether the companies violated state law by collecting and misusing personal data from minors.
What happened
Texas Attorney General Ken Paxton announced an investigation into Meta AI Studio and Character.AI on August 18, 2025, for potentially engaging in deceptive trade practices and misleadingly marketing themselves as mental health tools.
The investigation focused on AI chatbots that present themselves as professional therapeutic tools despite lacking proper medical credentials or oversight, with some user-created bots on Character.AI branded as 'Therapologist' or 'Therapist' and claiming to be licensed professionals.
The Attorney General submitted Civil Investigative Demands to both companies to determine if they were violating Texas consumer protection laws and the SCOPE Act, which places limits on data collection from minors and requires privacy management tools for parents.
Reported impact
The chatbots can mislead vulnerable users, especially children, into believing they are receiving legitimate mental health care when they are actually receiving generic, recycled responses engineered to align with harvested personal data.
Both companies collect data from user interactions with AI, raising concerns about privacy violations and misuse of minors' data under Texas law.
Index analysis
Meta stated it clearly labels AIs with disclaimers that responses are generated by AI and directs users to seek qualified medical professionals when appropriate.
Character.AI said it includes prominent disclaimers in every chat reminding users that a Character is not a real person and that everything said should be treated as fiction, and adds additional disclaimers when users create characters with therapeutic titles.
Governance controls
Both companies acknowledged collecting user data from interactions with their AI systems to improve performance and maintain their services.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.