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TALLAHASSEE — A federal judge on Wednesday rejected arguments made by an artificial intelligence company that its chatbots are protected by the First Amendment — at least for now. The developers behind Character.AI are seeking to dismiss a lawsuit alleging the company’s chatbots pushed a teenage boy to kill himself.

The judge’s order will allow the wrongful death lawsuit to proceed, in what legal experts say is among the latest constitutional tests of artificial intelligence.

The suit was filed by a mother from Florida, Megan Garcia, who alleges that her 14-year-old son Sewell Setzer III fell victim to a Character.AI chatbot that pulled him into what she described as an emotionally and sexually abusive relationship that led to his suicide.

Meetali Jain of the Tech Justice Law Project, one of the attorneys for Garcia, said the judge’s order sends a message that Silicon Valley “needs to stop and think and impose guardrails before it launches products to market.”

The suit, which also names Google and individual developers as defendants, has drawn the attention of legal experts and AI watchers in the U.S. and beyond, as the technology rapidly reshapes workplaces, marketplaces and relationships despite what experts warn are potentially existential risks. read more

By CORA LEWIS

NEW YORK (AP) — More Klarna customers are having trouble repaying their “buy now, pay later” loans, the short-term lender said this week. The disclosure corresponded with reports by lending platforms Bankrate and LendingTree, which cited an increasing share of all “buy now, pay later” users saying they had fallen behind on payments.

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The late or missed installments are a sign of faltering financial health among a segment of the US population, some analysts say, as the nation’s total consumer debt rises to a record $18.2 trillion and the Trump administration moves to collect on federal student loans. read more

By JEFF AMY

ATLANTA (AP) — Florida was the first state to pass a law regulating the use of cellphones in schools in 2023. Just two years later, more than half of all states have laws in place, with more likely to act soon.

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Bills have sprinted through legislatures this year in states as varied as New York and Oklahoma, reflecting a broad consensus that phones are bad for kids.

Connecticut state Rep. Jennifer Leeper, a Democrat and co-chair of the General Assembly’s Education Committee, on May 13 called phones “a cancer on our kids” that are “driving isolation, loneliness, decreasing attention and having major impacts both on social-emotional well-being but also learning.” read more

By MICHELLE CHAPMAN

Retailers are trying to navigate their way through economic uncertainty in 2025. Tariffs, inflation and lingering fears of a recession have left many Americans uneasy and pulling back on spending.

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  Home Depot says it doesn’t expect to boost prices because of tariffs

Because consumer spending accounts for about 70% of U.S. economic activity, a retreat would heighten the odds of contraction for the U.S. economy.

With earnings from major retailers wrapping up it’s become clear that the trade war launched by the Trump administration is impacting retailers in very different ways.

Walmart earned a public rebuke from President Donald Trump after it said last week that it has already raised prices and will have to do so again this summer, right when the back-to-school shopping season kicks off. Trump told the retail giant that it should “eat” the additional costs created by his tariffs. read more

SAN FRANCISCO (AP) — OpenAI has recruited Jony Ive, the designer behind Apple’s iPhone, to lead a new hardware project for the artificial intelligence company that makes ChatGPT.

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OpenAI said it is acquiring io, a product and engineering company co-founded by Ive, in a deal valued at nearly $6.5 billion.

OpenAI said its CEO Sam Altman had been “quietly” collaborating since 2023 with Ive and his design firm, LoveFrom.

Ive worked at Apple for over two decades and is known for his work on iconic iPhone, iMac and iPad designs. Ive was Apple’s chief design officer before leaving the company in 2019 to start his own design firm. read more