California became the first state to enact legislation regulating AI companion chatbots, and renewing concerns about a patchwork of regulations emerging across states. In a new insight, Technology and Innovation Policy Analyst Angela Luna discusses the growing debate over state versus federal oversight in emerging AI policy, and potential federal policy action.

Key points:

• AI companion chatbots, applications designed to converse with users in ways that simulate emotional support, are gaining popularity, especially among young users; the California law requires developers to implement safety protocols for these tools.
• While the California law establishes baseline standards, it has also raised concerns about a patchwork of AI regulations that could fragment the market and increase compliance costs.
• As the Trump Administration considers preempting state-level AI laws and adopting a light-touch regulatory approach that fosters innovation while addressing specific risks, increasing concerns about the AI companion market and the California law should prompt policymakers to assess whether federal legislation is needed and how it should be shaped.

Read the analysis.