New York Legislators Take Aim at Artificial Intelligence Chatbots

New York legislators are considering a bill (S7263) aimed at regulating AI chatbots that mislead users into believing they provide professional advice from licensed professionals such as doctors, therapists, or lawyers.
The Senate Internet & Technology Committee has approved the bill, positioning it for further review by the Senate.
The bill seeks to outlaw AI chatbots that simulate the practice of licensed professions and establishes conditions for private litigation when users suffer harm from relying on the chatbot’s advice.
Proprietors of chatbots would be required to include clear disclaimers indicating that users are interacting with an AI system rather than a human professional.
If enacted, the bill would increase the risk of litigation for companies embedding AI chatbots in their services, as it provides a clear route for users seeking compensation and attorneys’ fees.
The regulations, if passed, could serve as a model for other states’ similar legislation and highlight the necessity for clear regulation of AI in professions where licensing is required.
Uncertainty exists regarding the definition of “substantive” advice and liability allocation, which could lead to ambiguities in enforcement and potential legal challenges.
Companies using AI chatbots are advised to monitor this legislative activity and prepare their operations, insurance, and incident response plans to meet potential future regulations.

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