AI Regulation for Consumer Applications: How to Prepare for the New Regulations 2025
2025 marks the end of the "Wild West" era of AI: AI Act EU operational by August 2024 with AI literacy obligations by Feb. 2, 2025, governance and GPAI by Aug. 2. California pioneers with SB 243 (born after Sewell Setzer suicide, 14-year-old developed emotional relationship with chatbot) mandating ban on compulsive reward systems, suicide ideation detection, reminders every 3 hours "I'm not human," independent public audits, penalties $1,000/violation. SB 420 requires impact assessments for "high-risk automated decisions" with right to appeal human review. Real Enforcement: Noom cited 2022 for bots passed off as human coaches, settlement $56M. National trend: Alabama, Hawaii, Illinois, Maine, Massachusetts classify failure to notify AI chatbots as UDAP violation. Approach three tiers risk-critical systems (healthcare/transportation/energy) certification pre-deployment, consumer-facing transparent disclosures, general purpose registration+security testing. Regulatory patchwork without federal preemption: multi-state companies must navigate varying requirements. EU from August 2026: inform users AI interaction unless obvious, AI-generated content labeled machine-readable.