Okay, quick prediction time:
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Even if character.ai manages to win the lawsuit, this is probably gonna be the company's death knell. Even if the fallout of this incident doesn't lead to heavy regulation coming down on them, the death of one of their users is gonna cause horrific damage to their (already pretty poor AFAIK) reputation.
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On a larger scale, chatbot apps like Replika and character.ai (if not chatbots in general) are probably gonna go into a serious decline thanks to this - the idea that "our chatbot can potentially kill you" is now firmly planted in the public's mind, and I suspect their userbase is gonna blow their lid from how heavily the major apps are gonna lock their shit down.
From the looks of things, that's how their business model works.