Character AI Harms and FTC Inquiry

In this episode of ChatEDU (Counting What Counts: The Push to Measure AI Literacy), Matt & Liz start with a tech glitch & a visit with Aura, a Tesla voice model pretending to be a therapist. They shift to copyright lawsuits, student safety, & the need to define & measure AI literacy in schools.

Story #1: The Rundown

$1.5B Settlement: Anthropic agrees to pay authors for pirated training data. A major legal turning point. The court delays the deal & demands transparency & clear author rights.

Character.AI Report: 669 harmful chatbot interactions with kids found in 50 hours of testing.

FTC Investigation: The FTC opens a formal inquiry into AI companions & their impact on minors.

NotebookLM Upgrades: Flashcards, quizzes, audio guides, & LMS support added to Google’s AI study tool.

SETDA 2025 Report: AI is now the top state edtech priority. Device bans are rising, but so is investment in AI PD.

Curtin Disables AI Detection: Turnitin’s AI-writing detector will be turned off to support trust & modern assessment.

Detectors Still Struggle: Most AI detectors fail key benchmarks. Pangram is the only one showing strong results.

Open-Source AI Textbooks: A new tool lets educators build AI-powered textbooks from OER with no coding.

NYT Teen Contest: Students ages 13–19 can submit creative projects on life with AI. Due Oct 22.

Story #2: Social Learning in the Age of AI

A new study shows AI is replacing peer-to-peer learning. Students are skipping group study & turning to chatbots. The result is less collaboration, less creativity, & more isolation. Matt & Liz unpack the impact on student motivation & mentorship.

Story #3: Beneath the Surface – AI Literacy & the Measurement Gap

Schools are racing to teach AI, but how do we know students are learning what matters?

TeachAI ScenariosReady-to-use lessons that build source-checking & ethical use skills.

AI QuestA game-based platform from Google & Stanford where students train models & solve real problems.

ETS OpinionWithout shared definitions & measurement, AI literacy risks becoming a buzzword.

Liz shares how her new student-facing course approaches skills, reflection, & real-world prompts.

Bright Byte: Alter Ego

MIT’s new wearable lets users silently communicate with machines by detecting muscle signals in the jaw & throat. Built to support people with ALS & MS, this tool brings AI & accessibility together.

Links & Resources

NotebookLM

https://notebooklm.google/

AI Scenarios

ailiteracyframework.org

AI Quest

https://blog.google/outreach-initiatives/education/ai-quests/

ETS Opinion

https://hechingerreport.org/opinion-schools-cannot-teach-ai-literacy-without-a-way-to-measure-it/

Character.AI

https://www.ftc.gov/news-events/news/press-releases/2025/09/ftc-launches-inquiry-ai-chatbots-acting-companions

SETDA 2025

https://www.setda.org/priorities/state-trends/

Anthropic Settlement

https://www.npr.org/2025/09/05/nx-s1-5529404/anthropic-settlement-authors-copyright-ai

Judge Pushback

https://news.bloomberglaw.com/ip-law/anthropic-judge-blasts-copyright-pact-as-nowhere-close-to-done

Curtin Disables Detection

https://www.curtin.edu.au/news/oasis-news/update-on-turnitin-ai-detection-tool/

NBER Study

https://www.nber.org/papers/w34223

GenerativeTextbooks.org

NYT Contesthttps://www.nytimes.com/2025/09/05/learning/growing-up-with-ai-a-multimedia-challenge-for-teenagers-and-educators.html

Alter Ego

https://decrypt.co/338527/near-telepathic-wearable-communicate-silently-devices

Announcements

Check out the new Student AI Course for middle & high school. Email Matt & Liz at chatedu@edadvance.org 

The Fall Micro-Credential is open. Join us for the educator & school leader course starting in October -  skills21.org/ai/micro

Sponsors

The National Center for Next Generation Manufacturing. Explore their October 15–17 Summit in Rochester Hills, MI. www.nextgenmfg.org

EDIAThe AI-powered platform helping schools reduce absences & boost achievement edia.app/contact