On October 13, 2025, Governor Gavin Newsom signed SB 243, the first U.S. state law setting comprehensive rules for “companion chatbots” in California: operators must disclose chatbot identity (with reminders to minors every three hours), may not imply licensed medical/professional status, must prevent sexual content with minors, detect self‐harm and provide crisis referrals, and begin annual reporting to the California Office of Suicide Prevention on July 1, 2027; many provisions take effect January 1, 2026. The law creates a private right of action (damages, injunctive relief, attorneys’ fees), raising litigation, compliance and operational costs—prompting firms to revise product definitions, age‐verification, safety engineering, transparency and reporting processes and set aside budgets for liability. Key uncertainties include the “reasonable person” standard, scope of “companion” exclusions, and potential interaction with pending federal proposals.