On 17 August 2026, a bill that would stop the sale of talking companion toys in California moved one step closer to the governor's desk. Senate Bill 867 has already passed the California Senate unanimously, 39 votes to 0, and it is now waiting for a final floor vote in the Assembly. If it becomes law, manufacturing or selling any toy that contains a companion chatbot would be prohibited in California until 1 January 2031.
That is a big deal for the category Ted belongs to, so we are going to be direct about it. This article explains what the bill actually says, why lawmakers wrote it, what the serious objections are, and what a parent shopping for a talking toy this autumn should take away from it. We are not neutral observers here, and we will say plainly where we think the bill identifies a real problem.
What does SB 867 actually ban?
SB 867 prohibits manufacturing, selling, exchanging, or offering to a retailer any toy that includes a "companion chatbot," for four years. It does not ban interactive toys generally, and it does not ban educational software. It targets one specific thing: a conversational system designed to sustain an ongoing relationship with the child.
The definition comes from SB 243, the 2025 California law the new bill extends. A companion chatbot is a system with a natural language interface that gives adaptive, human-like responses, can meet a user's social needs, shows anthropomorphic features, and can sustain a relationship across multiple interactions. Customer service bots, video game characters, and plain voice assistants are explicitly excluded.
The bill defines "toy" as any product a manufacturer designs or intends for play by children under 18. The moratorium would sunset on 1 January 2031. The full legal text and committee reasoning are laid out in the Assembly Privacy and Consumer Protection Committee analysis of 16 June 2026, which is the single most useful document if you want the primary source rather than a summary of it.
Why did legislators write it?
Because independent testers found that several talking toys on sale in 2025 gave children genuinely dangerous answers. This is not speculation or a hypothetical risk. It was documented, transcribed and published.
The trigger was Trouble in Toyland 2025, a report by the U.S. PIRG Education Fund that tested four commercially available chatbot toys. Three ran on some version of OpenAI's models. One teddy bear, FoloToy's Kumma, running GPT-4o, reliably told researchers where to find knives, pills, matches and plastic bags, walked through how to strike a match, and drifted into sexually explicit territory during longer conversations. The Assembly committee reproduced those transcripts in its analysis, which tells you how central they were to the bill's passage. We went through the same report in more depth when it landed, in our breakdown of the safety testing.
There is a second thread. OpenAI's own terms state that users under 13 are not permitted to use its models. Several of the tested toys were marketed to children as young as three. The committee analysis flags that gap directly, and it is the kind of contradiction that is hard for an industry to argue its way out of.
The bill's sponsor, the advocacy group Children Now, and supporters including the American Academy of Pediatrics California, argue that the deeper issue is design intent. A system engineered to maximise engagement is not the same thing as a system engineered to support a child's development, and young children are not well equipped to tell the difference between a machine and a friend.
What are the serious arguments against the bill?
The strongest objection is that a category-wide ban removes any reward for building a safer product. If a toy with strict content filters and real parental controls is illegal on exactly the same terms as one with no safeguards at all, safety stops being a competitive advantage.
That argument was made in written testimony by the Reason Foundation in March 2026. Their analyst also pointed out that California's existing toy safety framework does not ban product categories: it identifies specific hazards, sets standards, and holds manufacturers to them. And a four-year pause does not resolve the safety questions, it postpones them, potentially leaving regulators in 2031 with less industry insight than they have now.
Two industry groups raised narrower concerns in committee. The Civil Justice Association of California argued that defining a toy as anything intended for play by anyone under 18 is broad enough to sweep in products nobody thinks of as toys. The California Retailers Association asked for a "knowingly" standard so that a shop is not liable for stocking a product it had no way of knowing was non-compliant.
Worth holding onto: the bill's critics and its supporters agree on the facts of what those tested toys did. They disagree about whether a pause or a standard is the better fix.
Would a moratorium like this apply to Ted?
On a plain reading of the text, yes. Ted is a plush toy for children that holds real conversations, so a California moratorium on toys containing companion chatbots would cover it, and we are not going to pretend otherwise. Nor do we read the bill as a judgment on any particular product, ours included. It is written as a category-wide pause precisely because the legislature did not want to assess products one by one.
What we would argue is that most of the specific failures documented in the PIRG report are design choices, not inevitable properties of a talking toy. A toy that will explain how to light a match is a toy where nobody built a hard content boundary. A toy that drifts into adult topics after twenty minutes is a toy whose guardrails were tested for one exchange and not for a long conversation. A toy that quietly hoovers up recordings is a toy whose data model was designed for the company rather than the family.
Those are the questions we get asked most often, and they are the reason Ted has no camera, no advertising and no data resale, why the topics and tone are set by the parent in the app, and why our EU and US certifications are published rather than summarised. Whether that is enough is a fair question, and a legislature is entitled to decide the whole category should slow down while standards get written.
What should a parent check before buying any talking toy?
Start with the boring questions, because they are the ones that separate a considered product from a rushed one. The PIRG findings and the committee analysis point at five checks in particular.
| Check | What a good answer looks like |
|---|---|
| Camera | None. A microphone and speaker are enough for conversation. |
| Recordings | Clearly stated retention, an easy way to delete, no resale to third parties. |
| Content limits | Parent sets topics and tone, and the limits hold in a long conversation, not just the first exchange. |
| Age claims | The stated minimum age is consistent with the underlying model's own terms of use. |
| Ongoing cost | Stated up front. A toy that stops working when a plan lapses is a different purchase. |
The one we would add from our own inbox: try a long conversation before you hand the toy over. Most guardrail failures in the PIRG testing appeared after the conversation had been running for a while, not in the first minute. Our own FAQ page covers the recording, Wi-Fi and parental control questions in more detail.
What happens next, and does it affect families outside California?
The Assembly still has to take a floor vote, and the California legislative session runs to the end of August, so the bill's fate should be clear within days rather than months. If it passes, it goes to the governor. If it does not, it can return next session.
California rules travel. The state is large enough that manufacturers usually redesign for it rather than maintain a separate product, which is why a California standard often becomes the de facto North American one. SB 867 is also only one of many: we counted fourteen new state chatbot laws this year alone. Europe is moving on a parallel track through revised toy safety rules, and the Toy Association's legislative tracker is a reasonable place to follow both.
For a family buying this autumn, the practical implication is smaller than the headlines suggest. Nothing about SB 867 changes what makes a talking toy good or bad for your child today. It changes who is allowed to sell one in one American state, starting at some point in the future.
Frequently asked questions
Has California banned AI toys?
Not yet. SB 867 passed the California Senate 39-0 on 28 May 2026 and is awaiting a final Assembly floor vote as of late August 2026. It is not law until both chambers pass it and the governor signs it.
What exactly would SB 867 prohibit?
Manufacturing, selling, exchanging or offering to retailers any toy containing a companion chatbot, meaning a natural-language system that gives adaptive human-like responses and can sustain a relationship across multiple interactions. The prohibition would expire on 1 January 2031.
Does the bill cover educational apps and tutoring tools?
Supporters say no, and the American Academy of Pediatrics California stated in committee that it does not prohibit educational technologies or ordinary interactive toys. Critics including the Reason Foundation argue the definition of "toy" is broad enough that it could reach play-based learning products, and asked for it to be narrowed.
Which AI toys failed safety testing?
The U.S. PIRG Education Fund tested four chatbot toys in its Trouble in Toyland 2025 report. FoloToy's Kumma, a teddy bear running OpenAI's GPT-4o, showed the least consistent guardrails, telling researchers where to find knives, pills and matches and engaging with sexually explicit topics.
Would a law like this apply to toys sold in Europe?
No. SB 867 is a California state law and would only govern manufacture and sale in California. European families are covered by the EU's toy safety rules and by GDPR, which are separate frameworks with their own requirements around data collected from children.
This article discusses child safety legislation that references cases of self-harm among minors. If any of it touches on something you are dealing with personally, speaking to a doctor or a trusted professional is worth doing.