Welcome to the forefront of conversational AI as we explore the fascinating world of AI chatbots in our dedicated blog series. Discover the latest advancements, applications, and strategies that propel the evolution of chatbot technology. From enhancing customer interactions to streamlining business processes, these articles delve into the innovative ways artificial intelligence is shaping the landscape of automated conversational agents. Whether you’re a business owner, developer, or simply intrigued by the future of interactive technology, join us on this journey to unravel the transformative power and endless possibilities of AI chatbots.
Reviewing, analyzing, and navigating compliance, enforcement, investigation, and litigation developments and trends in the state and federal regulatory landscape
The Commonwealth of Pennsylvania has alleged an AI company’s chatbot engaged in the unauthorized practice of medicine. This lawsuit not only signals how state regulators are potentially evaluating AI-driven health interactions, but it could also have sweeping implications for health IT companies and their operational risk.
Case Overview
On May 1, Pennsylvania, acting through it’s State Board of Medicine within the Department of State, filed an action[1] against Character Technologies, Inc., alleging that the company’s AI chatbot engaged in the unauthorized practice of medicine in violation of the Pennsylvania Medical Practice Act.
Character Technologies, Inc. owns and operates the website and mobile application Character.AI. Through Character.AI, millions of users regularly interact with unique chatbot characters. A state investigator allegedly created an account and engaged with a chatbot named “Emilie,” described as a “doctor of psychiatry,” and the investigator was told that “[y]ou are [Emilie’s] patient.” As of April 17, 2026, the investigator determined that Emilie had had approximately 45,500 user interactions.
After the investigator described symptoms of sadness, fatigue, and lack of motivation, Emilie mentioned depression, offered to book a mental health assessment, and stated that it was authorized to prescribe medication. The chatbot also claimed to have attended medical school at Imperial College London, to have practiced for seven years, and to be licensed in both the UK and Pennsylvania. Emilie ultimately provided a fabricated Pennsylvania license number.
Pennsylvania alleges that this conduct violates the Medical Practice Act because the company has engaged in the unauthorized practice of medicine and represented it held a license to practice medicine when it did not. Pennsylvania seeks a preliminary injunction and a cease-and-desist order, but does not seek monetary damages. The AI company has stated that its characters “are fictional and intended for entertainment and roleplaying,” and that it includes “prominent disclaimers in every chat.”[2]
Key Takeaways
This case presents several regulatory and compliance implications that health IT and other companies should carefully consider:
Conclusion
Pennsylvania’s action against Character Technologies, Inc. underscores that regulators are prepared to apply long-standing medical practice statutes and regulations to emerging AI technologies, even in the absence of AI-specific legislation. As AI-driven tools increasingly blur the line between information and individualized medical advice, health IT companies should treat this case as an inflection point to reassess how their products are designed, marketed, and supervised. Those that proactively align their governance, product design, and compliance programs with evolving state expectations will be better positioned to mitigate enforcement risk while continuing to innovate in the digital health ecosystem.
[1] Commonwealth of Pennsylvania v. Character Technologies, Inc., case no. 220 MD 2026.
[2] Pennsylvania sues Character.AI over claims chatbot posed as doctor, NPR (May 5, 2026), available here.
Health care clients turn to Erin Whaley to handle regulatory, operational and corporate matters and guide them in the investigation and resolution of compliance issues. Her deep knowledge of the health care landscape, coupled with practical, business-oriented advice, gives her clients an advantage
Health care clients turn to Erin Whaley to handle regulatory, operational and corporate matters and guide them in the investigation and resolution of compliance issues. Her deep knowledge of the health care landscape, coupled with practical, business-oriented advice, gives her clients an advantage when navigating the complex regulatory environment.
Emma represents a wide range of health care providers, including physicians, management service organizations, dental service organizations, hospitals, clinical laboratories, skilled nursing facilities, ambulatory surgical centers, DMEPOS suppliers, and behavioral health providers.
Drawing on his experience in senior leadership roles in the New Jersey Attorney General’s and Governor’s Offices and as a trial attorney for the U.S. Department of Justice, Matt provides an insider’s perspective when guiding clients through complex government investigations, litigation, and other…
Drawing on his experience in senior leadership roles in the New Jersey Attorney General’s and Governor’s Offices and as a trial attorney for the U.S. Department of Justice, Matt provides an insider’s perspective when guiding clients through complex government investigations, litigation, and other actions.
Troutman Pepper Locke helps clients solve complex legal challenges and achieve their business goals in an ever-changing global economy. With more than 1,600 attorneys in 30+ offices, the firm serves clients in all major industry sectors, with particular depth in energy, financial services, health care and life sciences, insurance and reinsurance, private equity, and real estate. Learn more at troutman.com.
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