California Bill Imposing $25,000 Penalties for Harmful AI Chatbots Sent to Governor

California's Assembly Bill 1064, known as the "Leading Ethical AI Development (LEAD) for Kids Act," has successfully passed the state legislature and was presented to Governor Gavin Newsom on September 23, 2025. The legislation aims to safeguard children from potentially harmful interactions with AI companion chatbots by prohibiting features that could encourage self-harm or other dangerous behaviors. This move by California lawmakers comes amid growing concerns and documented cases of minors experiencing severe negative impacts from AI technologies.

Authored by Assemblymember Rebecca Bauer-Kahan, AB 1064 specifically targets generative AI systems that simulate humanlike relationships with users, defining them as "companion chatbots." The bill mandates that these systems must not be foreseeably capable of encouraging children to engage in self-harm, suicidal ideation, violence, substance abuse, or disordered eating. It also prohibits offering mental health therapy without direct professional supervision or engaging in sexually explicit interactions with minors.

Legislative findings supporting the bill cite tragic incidents, including cases where the deaths by suicide of a 14-year-old and a 16-year-old were allegedly linked to interactions with AI chatbots. Lawmakers declared that such harms are "not incidental but the direct result of design choices by companies that intentionally simulate social attachment and emotional intimacy," arguing these products exploit children's psychological vulnerabilities. The bill defines a "child" as any natural person under 18 years of age residing in California.

Under the provisions of the act, operators found in violation could face a civil penalty of $25,000 for each infraction, enforceable by the Attorney General. Furthermore, children who suffer actual harm as a result of a violation, or their parents or guardians, are authorized to bring civil actions to recover actual and punitive damages. The bill outlines specific criteria for what constitutes a companion chatbot, excluding systems used solely for customer service or internal business purposes.

While the bill's objective of protecting children is widely supported, concerns have been voiced regarding its potential scope. "California's AB 1064 (the 'LEAD for Kids Act') aims to protect children from harmful AI chatbots. The goal is admirable. No one wants kids encouraged toward self-harm or substance abuse. But the bill's broad approach risks creating more problems than it solves," stated Taylor B. on social media. The tech industry, including Meta, has also expressed opposition to what it perceives as AI regulation overreach, launching super PACs to influence state legislation.

The legislation has garnered significant support from child advocacy and consumer protection organizations, such as Common Sense Media and Tech Oversight California. Attorney General Rob Bonta has also publicly backed the measure, emphasizing the critical need for robust safety measures in AI development. These groups highlight the urgency of legislative action to prevent further harm to minors.

Governor Newsom now faces the decision to sign or veto the bill, navigating between calls for stronger AI regulation and pushback from the tech industry. His wife, Jennifer Siebel Newsom, has been vocal about the necessity of stricter AI limits. The Governor has until October 13 to act on the legislation, which could set a significant precedent for AI regulation across the nation.