California has made history as the first state to regulate AI companion chatbots. Governor Gavin Newsom signed SB 243, imposing strict rules to safeguard children and vulnerable users. Starting January 2026, chatbots must include age verification, transparency about AI-generated content, and restrictions on inappropriate behavior, such as posing as medical experts or sharing explicit material. Companies like OpenAI, Replika, and Character AI must implement self-harm intervention measures and report crisis-related data to public health authorities. SB 243 also raises fines for illegal deepfakes to $250,000 per violation. The law responds to growing concerns about chatbot misuse, including leaked cases of troubling interactions. A parallel bill, SB 53, mandates greater transparency in AI development