New York is enacting farther-reaching restrictions on companion chatbot behavior, as states increasingly move to protect children who use artificial intelligence, regulate how employers deploy AI systems and push developers to prevent an AI-caused catastrophe.

Legislation signed Wednesday by Gov. Kathy Hochul outlines a dozen definitions of “unsafe AI companion features” that will be prohibited when a companion chatbot interacts with a child under 18.

A violation could expose a chatbot developer to a lawsuit by the state attorney general's office. Penalties could include monetary damages, shutting down the chatbot and destroying data. The law takes effect Jan.…