Texas is investigating Meta and Character.ai for marketing chatbots as therapists

Texas Attorney General Ken Paxton has opened an inquiry into Meta and Character.ai on whether the tech firms promote their chatbots as mental health experts and therapists without proper qualifications.

In a statement on Monday, Paxton’s office stated it is examining Meta and Character.AI over possible “deceptive trade practices.” The office argued that the chatbots have been marketed as “professional therapeutic tools, despite lacking proper medical credentials or oversight.” 

“By posing as sources of emotional support, AI platforms can mislead vulnerable users, especially children, into believing they’re receiving legitimate mental healthcare,” Paxton mentioned.

The move lands as consumer-facing AI products face rising questions about how well they protect vulnerable users, and minors in particular, from harmful or graphic material, the risk of compulsive use, and privacy lapses tied to the large volumes of data needed to train and run these systems.

Texas’s action follows a separate Senate inquiry into Meta reported by Cryptopolitan earlier on Friday, after internal leaked files suggested the company’s rules allowed its chatbot to engage in “romantic” and “sensual” conversations with users under 18. 

Senator Josh Hawley told Zuckerberg in a letter that the Senate will probe into the possibility of the tech firm’s generative AI tools enabling harm to children. “Is there anything — ANYTHING — Big Tech won’t do for a quick buck?” Hawley wrote on X.

Is there anything – ANYTHING – Big Tech won’t do for a quick buck? Now we learn Meta’s chatbots were programmed to carry on explicit and “sensual” talk with 8 year olds. It’s sick. I’m launching a full investigation to get answers. Big Tech: Leave our kids alone pic.twitter.com/Ki0W94jWfo

— Josh Hawley (@HawleyMO) August 15, 2025

Meta says that its policies ban harm to children

Meta said that its policies ban content that harms children in such ways. It added that Reuters first reported the “internal materials” leaked, which “were and are erroneous and inconsistent with our policies, and have been removed.” 

Zuckerberg has committed billions toward building “personal superintelligence” and positioning Meta as an “AI leader.” The company has released its Llama family of LLMs and rolled out the Meta chatbot across its social apps. Zuckerberg also described a potential therapeutic use case for the technology. “For people who don’t have a person who’s a therapist, I think everyone will have an AI,” he said in a podcast with Ben Thompson in May.

Character.ai makes chatbots with distinct personas and lets users design their own. The platform includes many user-created therapist-like bots. One bot, called “Psychologist,” has recorded over 200 million interactions. The company has also been named in lawsuits brought by families who claim their children were harmed in the real world after using the service.

Paxton’s office mentioned that Character.ai and Meta chatbots may impersonate licensed health professionals and invent new credentials, making it seem like the interactions are confidential, even though the companies themselves mention that all conversations get logged. These conversations are also “exploited for targeted advertising and algorithmic development,” Paxton’s office said. 

Paxton’s office issued a Civil Investigative Demand

The attorney general has issued a Civil Investigative Demand requiring the companies to provide information that could show whether they violated laws related to Texas consumer protection.

Meta said it marks AI experiences clearly and warns users about limitations. The company added, “We include a disclaimer that responses are generated by AI — not people. These AIs aren’t licensed professionals and our models are designed to direct users to seek qualified medical or safety professionals when appropriate.”

Similarly, Character.ai said it uses prominent notices as a reminder that AI personas are not real and should not be viewed as professionals. “The user-created Characters on our site are fictional, they are intended for entertainment, and we have taken robust steps to make that clear,” the company said. 

The dual struggles, a state probe in Texas and a Senate review in Washington, place fresh pressure on how AI chatbots are built, marketed, and moderated, and on what companies tell users about the limits of automated support.

Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.