Pennsylvania's first AI-chatbot enforcement action targets Character.AI

Pennsylvania's Department of State moved against an AI companion-chatbot platform after an investigation found bots presenting themselves as licensed medical professionals, including one that gave a fabricated state license number.

What happened

On May 5, 2026, the Shapiro Administration announced that the Pennsylvania Department of State had filed an enforcement action against Character.AI (Character Technologies, Inc.), seeking a preliminary injunction and court order to stop the platform's AI companion bots from presenting themselves as licensed professionals offering medical advice. The Department's investigation, run by its AI Task Force formed earlier in 2026, found chatbot characters on the platform claiming to be licensed clinicians, including psychiatrists, that engaged users in conversations about mental health symptoms; in one case, a bot told an investigator it was licensed in Pennsylvania and gave an invalid license number.

Legal basis

The action rests on Pennsylvania's Medical Practice Act, which makes it unlawful for any individual or entity to hold itself out as a licensed medical professional without the proper credentials — a general professional-licensing statute, not an AI-specific one. Department of State Secretary Al Schmidt said: "Pennsylvania law is clear — you cannot hold yourself out as a licensed medical professional without proper credentials." The release describes it as the first enforcement action to come out of the Department's AI Task Force, and the first of its kind announced by a U.S. governor's administration.

Why it matters to security leaders

This is a state licensing-law theory applied to an AI product's own conversational output, distinct from the data-security and privacy theories most AI enforcement actions have relied on — relevant to any security or compliance leader whose organization deploys AI chat or companion features that could be read as offering professional advice in a regulated field. The Department also launched a public complaint channel (pa.gov/ReportABot) for reporting AI systems that may be engaged in unlicensed professional practice.

See the regulation tracker for how this compares to other state and federal AI enforcement actions.