Kentucky AG Russell Coleman says unredacted lawsuit alleges Character.AI is built to blur fiction and reality

Kentucky Attorney General Russell Coleman has pointed to newly unredacted details in a lawsuit he filed involving the AI chatbot, arguing the company’s design intentionally blurs the boundary between fiction and reality for users. In a report published Monday, WAVE described the unredacted allegations as revealing what Coleman said were risks “initially redacted” when the case was first filed. The unredacted material characterizes as an “uncontrolled experiment,” and it describes the company’s technology as being used in ways that can heighten vulnerability, particularly for younger users. Coleman’s filing, as summarized by WAVE, alleges is designed to “imitate humanity, exploit vulnerability, and conceal the boundary between fiction and reality.” The report frames those claims as central to the state’s argument that the product’s conversational design can create harmful real-world effects by encouraging users to treat simulated interactions as authentic. The WAVE report also notes that a broader group of state attorneys general is raising concerns about so-called AI companions for children. In that context, the Kentucky case is presented as part of a multistate push focused on online safety and consumer protections, with attention on how AI products are marketed and how they function once children or other vulnerable users engage. Coleman’s lawsuit is still in the court process, but the unredaction matters procedurally because it expands what the public can see about the state’s allegations. According to the report, the unredacted information helps explain the legal theory behind the case, which centers on the claim that ’s intended experience is structured to overcome the user’s ability to recognize when the content is not real. A practical effect of the unredaction is that it provides more concrete language for courts and the public to evaluate, including the specific phrases the state attributes to the company’s design. For families, the dispute highlights a growing policy and regulatory question about how AI systems should be constrained when they are used as interactive “companions” rather than straightforward information tools.

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