California has taken a decisive step toward regulating the use of AI chatbots, passing Senate Bill 243 (SB 243) — a first-of-its-kind law mandating that AI companions disclose when users are not interacting with a human. Signed by Governor Gavin Newsom on October 13, the bill introduces new transparency and safety obligations for developers of AI-driven conversational systems.

State Senator Steve Padilla, who authored the legislation, described it as the “first-in-the-nation AI chatbot safeguards”, aimed at protecting consumers from being deceived or manipulated by advanced conversational technologies.

Under SB 243, AI companies operating companion chatbots must provide an explicit disclaimer whenever users could reasonably mistake a chatbot for a person. The intent, according to the bill, is to ensure users understand they are interacting with software — not a human being — especially in emotionally sensitive or personal contexts.

The legislation also establishes a new reporting mandate. Starting in 2026, chatbot operators must file annual safety reports with the Office of Suicide Prevention, detailing their systems’ capabilities to detect, remove, and respond to user expressions of suicidal ideation. The Office is required to publish these reports publicly, increasing accountability and transparency.

Governor Gavin Newsom emphasized the need to balance technological progress with social responsibility when signing the law.

“Emerging technology like chatbots and social media can inspire, educate, and connect – but without real guardrails, technology can also exploit, mislead, and endanger our kids,” Newsom said. “We can continue to lead in AI and technology, but we must do it responsibly — protecting our children every step of the way. Our children’s safety is not for sale.”

The statement accompanied several other new laws focused on online safety for children, including stricter age-gating requirements for digital and hardware platforms.

The passage of SB 243 follows another major legislative move — the signing of Senate Bill 53, California’s landmark AI transparency law that requires AI systems to disclose when content is artificially generated. Together, these laws signal a growing trend toward AI accountability and consumer protection in the nation’s largest technology hub.

While SB 53 sparked intense debate among AI developers, SB 243 narrows its focus to companion chatbots, an emerging category of AI tools that simulate conversation, empathy, and companionship. Lawmakers argue that without regulation, these systems could blur ethical lines or expose vulnerable users to harm.

Q1: What is the main purpose of SB 243?
A: To ensure AI chatbots clearly disclose their non-human identity and implement safeguards for user safety and mental health.

Q2: Who must comply with the new law?
A: Developers and operators of companion AI chatbots accessible to California users.

Q3: When will the new requirements take effect?
A: The disclosure and reporting provisions begin next year, with annual reports required starting in 2026.

Q4: How does SB 243 differ from SB 53?
A: SB 243 focuses on chatbot transparency and mental health safeguards, while SB 53 addresses AI-generated content disclosure across digital platforms.

Q5: What are the broader implications for the AI industry?
A: The law could become a national model for AI regulation, encouraging other states to adopt disclosure and safety standards for conversational AI.

California’s SB 243 marks a major shift in how the state — and potentially the country — approaches AI accountability. By mandating that AI chatbots identify themselves and implement user safety reporting, the law establishes clear expectations for ethical design and transparency.

As conversational AI becomes increasingly lifelike, California’s policy signals that innovation must move in tandem with responsibility and public trust — setting a precedent that other jurisdictions are likely to follow.

Beyond its immediate impact on chatbot developers, the law represents a deeper recognition of AI’s social power — especially in spaces where emotional engagement, trust, or mental health are involved. Requiring clear disclosure helps safeguard vulnerable users, while the reporting mandate pushes the industry toward greater accountability in content moderation and crisis intervention.

For policymakers, SB 243 offers a blueprint for balancing innovation with protection, suggesting that the next phase of AI governance will hinge not only on technical transparency but also on human well-being.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant used for research and drafting. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.