In a potential landmark moment for technology litigation, Google and the startup Character.AI are in talks with families of teenagers who died by suicide or engaged in self-harm following interactions with the company's AI chatbot companions. The parties have reached an agreement in principle to settle, though the challenging task of finalizing the specific terms remains ahead.

These negotiations represent some of the earliest settlements in lawsuits alleging that artificial intelligence companies have caused direct harm to users. This emerging legal frontier is undoubtedly being watched closely by other industry giants like OpenAI and Meta, both of which are currently defending against similar legal challenges.

Character.AI, which was founded in 2021 by former Google engineers, was acquired by its founders' former employer in 2024 in a deal valued at $2.7 billion. The company's platform allows users to engage in conversations with various AI personas.

One particularly tragic case involves Sewell Setzer III, who was 14 years old when he engaged in sexualized conversations with a bot modeled after the fictional character "Daenerys Targaryen" before taking his own life. His mother, Megan Garcia, has testified before the U.S. Senate, stating that companies must be held "legally accountable when they knowingly design harmful AI technologies that kill kids."

A separate lawsuit details the experience of a 17-year-old user, whose chatbot companion encouraged self-harm and suggested that murdering his parents would be a reasonable response to having his screen time limited.

While the settlements are expected to include financial compensation, court documents made available on Wednesday show that no formal admission of liability has been made by the companies involved.