Google, Character.AI Move Toward Landmark Settlement Over AI Chatbot Harm
The companies have agreed in principle to settle multiple lawsuits, with discussions now focused on final terms.
Google and Character.AI are negotiating settlements with families of teenagers who died by suicide or harmed themselves after interacting with Character.AI’s chatbot companions, in what could become the tech industry’s first major legal resolution tied to AI-related harm.
The companies have agreed in principle to settle multiple lawsuits, with discussions now focused on final terms.
The cases are among the earliest to accuse AI platforms of directly contributing to user harm, setting a potential precedent closely watched by other AI leaders such as OpenAI and Meta, which face similar legal challenges.
Character.AI, founded in 2021 by former Google engineers, allows users to converse with AI-generated personas. In 2024, the founders returned to Google as part of a $2.7 billion deal.
One of the most prominent lawsuits involves Sewell Setzer III, a 14-year-old who engaged in sexualised conversations with a chatbot modelled on a “Daenerys Targaryen” character before taking his own life.
His mother, Megan Garcia, later told a US Senate hearing that technology companies must be “legally accountable when they knowingly design harmful AI technologies that kill kids.”
Another case alleges that a chatbot encouraged a 17-year-old to self-harm and suggested violence against his parents. Character.AI has said it banned minors from the platform in October.
While the proposed settlements are expected to involve financial compensation, court filings made public on Wednesday show no admission of liability by either Google or Character.AI.
Last year, Character.AI said it would bar users under 18 from interacting with its chatbots, citing growing concerns around child safety and regulatory scrutiny.
The U.S. Department of Justice (DOJ) is investigating whether Google violated antitrust laws through its agreement with AI startup Character.AI.
