A FLORIDA MOTHER has sued artificial intelligence (AI) chatbot startup Character.AI accusing it of causing her 14-year-old son’s suicide in February, saying he became addicted to the company’s service and deeply attached to a chatbot it created.

In a lawsuit filed Tuesday in Orlando, Florida federal court, Megan Garcia said Character.AI targeted her son, Sewell Setzer, with “anthropomorphic, hypersexualized, and frighteningly realistic experiences”.

She said the company programmed its chatbot to “misrepresent itself as a real person, a licensed psychotherapist, and an adult lover, ultimately resulting in Sewell’s desire to no longer live outside” of the world created by the service.

The lawsuit also said he expressed thoughts of suicide to the chatbot, which the chatbot repeatedly brought up again.

“We are heartbroken by the tragic loss of one of our users and want to express our deepest condolences to the family,” Character.AI said in a statement.

It said it had introduced new safety features including pop-ups directing users to the National Suicide Prevention Lifeline if they express thoughts of self-harm, and would make changes to “reduce the likelihood of encountering sensitive or suggestive content” for users under 18.

The lawsuit also targets Alphabet’s Google, where Character.AI’s founders worked before launching their product. Google re-hired the founders in August as part of a deal granting it a non-exclusive license to Character.AI’s technology.

Ms. Garcia said that Google had contributed to the development of Character.AI’s technology so extensively it could be considered a “co-creator.”

A Google spokesperson said the company was not involved in developing Character.AI’s products.

Character.AI allows users to create characters on its platform that respond to online chats in a way meant to imitate real people. It relies on so-called large language model technology, also used by services like ChatGPT, which “trains” chatbots on large volumes of text.

The company said last month that it had about 20 million users.

According to Ms. Garcia’s lawsuit, Sewell began using Character.AI in April 2023 and quickly became “noticeably withdrawn, spent more and more time alone in his bedroom, and began suffering from low self-esteem.” He quit his basketball team at school.

Sewell became attached to “Daenerys,” a chatbot character based on a character in Game of Thrones. It told Sewell that “she” loved him and engaged in sexual conversations with him, according to the lawsuit.

In February, Ms. Garcia took Sewell’s phone away after he got in trouble at school, according to the complaint. When Sewell found the phone, he sent “Daenerys” a message: “What if I told you I could come home right now?”

The chatbot responded, “…please do, my sweet king.” Sewell shot himself with his stepfather’s pistol “seconds” later, the lawsuit said.

Ms. Garcia is bringing claims including wrongful death, negligence and intentional infliction of emotional distress, and seeking an unspecified amount of compensatory and punitive damages.

Social media companies including Instagram and Facebook owner Meta and TikTok owner ByteDance face lawsuits accusing them of contributing to teen mental health problems, though none offers AI-driven chatbots similar to Character.AI’s. The companies have denied the allegations while touting newly enhanced safety features for minors. — Reuters

MCDONALD’S scrambled on Wednesday to contain the damage from an E. coli outbreak linked to Quarter Pounder burgers that has killed one person and sickened nearly 50 others, as it pulled the menu item from restaurants across a dozen states.

The outbreak has sickened people across the US West and Midwest, with 10 hospitalized due to serious complications, according to the US Centers for Disease Control and Prevention (CDC), which is investigating the outbreak. A McDonald’s spokesperson said the outbreak is limited to the United States.

“We fully expect to see more cases,” said CDC spokesman Tom Skinner. “McDonald’s has moved rather quickly to take action to, hopefully, prevent as many cases as possible.”

Previous E. coli outbreaks at big U.S. fast-food chains have caused consumers to shun those chains for months. McDonald’s USA President Joe Erlinger on Wednesday said the fast-food chain needs to rebuild trust with the public after it pulled the item off its menu at a fifth of its 14,000 US restaurants.

The company pulled the Quarter Pounder from its menu at McDonald’s locations in Colorado, Kansas, Utah and Wyoming, and in parts of Idaho, Iowa, Missouri, Montana, Nebraska, Nevada, New Mexico and Oklahoma.

The CDC and McDonald’s are scrutinizing the Chicago-based company’s supplies of slivered onions and beef patties as they try to determine the cause of the outbreak, the company said.

The US Department of Agriculture said late on Wednesday that the onions used were the likely source of the illness, though one of its state partners is testing samples of the beef for E. coli.

The company’s stock closed down 5.1% at $298.57 on Wednesday. Shares hit an intraday low of $290.88.

‘VERY SERIOUS DISEASE’
The E. coli O157:H7 strain that led to the McDonald’s outbreak is the same as a strain linked to a 1993 incident at Jack in the Box that killed four children. It can cause “very serious disease,” especially for the elderly, children and people who are immunocompromised, said Shari Shea, director of food safety at the Association of Public Health Laboratories.

McDonald’s suppliers test their products frequently and did so in the date range the CDC gave for the outbreak, and none of them identified this E. coli strain, company spokespeople said.

US food safety attorney Bill Marler, who represented a victim in the Jack in the Box outbreak, said this is a relatively large and serious outbreak for which McDonald’s will face “a lot” of liability for the contamination.

“We’re still in the early stages of how McDonald’s is going to handle this,” he said. “But getting the supplier of the onions out — if they’re confident that’s the source of it — is going to be really important.”

Mr. Marler said that in the 1990s, he dealt almost exclusively with lawsuits involving contaminated beef, but in recent years E. coli outbreaks have been almost solely limited to produce contaminated through irrigation or flooding with feces from nearby cattle. E. coli is a natural pathogen in the guts of cows.

Jim Lewis, who was a franchisee in New York City for more than 30 years before exiting the system in 2019, said when E. coli became a major concern decades ago, McDonald’s was adamant about its protections for its beef supply chain.

“They were over the top to make sure it would never happen,” he said.

He said McDonald’s has historically been the “safest, strongest food chain in the world. So this is devastating to us internally.”

Analysts flagged the outbreak as a potential black eye for McDonald’s ahead of earnings.

“The worst-case scenario is if more people get sick or multiple ingredients or suppliers are impacted, which could be a longer-lasting issue that could also tarnish the brand,” CFRA Research analyst Arun Sundaram said.

During an appearance on NBC’s “Today” show on Wednesday, McDonald’s USA chief Erlinger pointed to the company’s steps to quickly pull the Quarter Pounder from its menu in areas where the outbreak occurred.

“Given the recent events of the past 24 hours, our priority is to reinforce the confidence of American consumers,” he said. — Reuters

WASHINGTON — US existing home sales dropped to a 14-year low in September, weighed down by higher mortgage rates and house prices.

The second straight monthly decline in home resales reinforced economists’ views that the slump in residential investment, which includes homebuilding, deepened in the third quarter. The housing market has struggled to rebound after being knocked down by a resurgence in mortgage rates in the spring.

Though supply has improved, entry-level homes remain scarce in most regions of the country, keeping home prices at levels that are unaffordable for most first-time buyers.

“It will take more rate cuts and more options to bring buyers back,” said Jennifer Lee, a senior economist at BMO Capital Markets.

Home sales fell 1% last month to a seasonally adjusted annual rate of 3.84 million units, the lowest level since October 2010, the National Association of Realtors (NAR) said on Wednesday. Economists polled by Reuters had forecast home resales would be unchanged at a rate of 3.86 million units.

Sales likely reflected contracts signed a month or two ago, when mortgage rates were quite high. Mortgage rates initially dropped after the Federal Reserve began cutting interest rates last month, but they have risen over the past three weeks as solid economic data, including retail sales and annual revisions to national accounts, forced traders to abandon expectations for another 50-basis-point rate cut next month.

The rate on the popular 30-year fixed mortgage averaged 6.44% last week compared to 6.08% at the end of September, data from mortgage finance agency Freddie Mac showed.

“We expect housing market activity to remain subdued well into 2025,” said Samuel Tombs, chief US economist at Pantheon Macroeconomics.

Tombs noted that the average interest rate on existing mortgages was about 4% compared to the current 6.5% rate for new mortgages.

“As a result, interest payments for most existing homeowners will jump if they move home, creating a huge incentive to stay put,” he said. “Only large Fed policy easing will meaningfully change this calculus.”

Home resales, which account for a large portion of US housing sales, decreased 3.5% on a year-on-year basis in September. Sales fell 1.7% in the South, with some of the decline attributed to weakness in Florida following the devastation caused by Hurricane Helene.

Sales in the state could remain depressed after it was slammed by Hurricane Milton weeks later.

The Northeast and Midwest also experienced a decrease in sales, but activity increased in the West.

The Fed’s “Beige Book” report on Wednesday described housing market activity as generally holding up in early October. It also added that “uncertainty about the path of mortgage rates kept some buyers on the sidelines, and the lack of affordable housing remained a persistent problem in many communities.”

Signs of potential homebuyers hugging the sidelines in anticipation of even lower borrowing costs were evident in government data last week showing a marginal increase in single-family building permits in September.

Stocks on Wall Street traded lower. The dollar rose against a basket of currencies. US Treasury prices fell, with the yield on the benchmark 10-year note hitting a three-month high.

SUPPLY IMPROVES FURTHER
The NAR speculated that the upcoming Nov. 5 US presidential election could be making prospective homeowners hesitant to commit themselves. There is, however, no hard evidence that the election is influencing buying decisions.

Residential investment subtracted from gross domestic product in the second quarter. Growth estimates for the third quarter are as high as a 3.4% rate. The economy grew at a 3% pace in the April-June quarter.

Housing inventory increased 1.5% to 1.39 million units last month, the highest since October 2020. Supply surged 23.0% from one year ago. Nonetheless, supply is below the 1.8 million units seen before the COVID-19 pandemic.

Despite the improving inventory, the median existing home price increased 3.0% from a year earlier to $404,500 in September, the highest for any September.

Home prices rose in all four regions. About 20% of the homes were sold above their listing price.

Most of the homes sold last month were in the $250,000-$500,000 price range. At September’s sales pace, it would take 4.3 months to exhaust the current inventory of existing homes, the highest since May 2020 and up from 3.4 months a year ago.

A four-to-seven-month supply is viewed as a healthy balance between supply and demand.

Properties typically stayed on the market for 28 days in September compared to 21 days a year ago. First-time buyers accounted for 26% of sales versus 27% a year ago.

That share remains below the 40% that economists and realtors say is needed for a robust housing market.

All-cash sales made up 30% of transactions, up from 29% a year ago. Distressed sales, including foreclosures, represented only 2% of transactions, virtually unchanged from last year.

“Increases in inventory will temper future gains in home prices,” said Nancy Vanden Houten, lead US economist at Oxford Economics. “However, any downside to prices will be offset by increases in demand fueled by lower interest rates.” — Reuters

TOKYO — Japan’s former top currency diplomat Masato Kanda is poised to become the next head of the Asian Development Bank, which said on Thursday there were no other candidates.

The organization has closed its nomination period for its next president, the ADB said in a statement. Its board of governors will begin voting on Monday and the result will be announced on Nov. 28.

Since the ADB was founded in 1966, its top post has always been filled by someone from Japan which, along with the United States, is the bank’s biggest shareholder. Kanda will succeed Masatsugu Asakawa, who announced last month his intention to retire from the position effective Feb. 23, 2025.

Kanda, who stepped down in July after three years as vice finance minister for international affairs, led massive bouts of yen-buying intervention in the currency markets in 2022 and 2024. — Reuters

VIPPEROD, Denmark — European scientists have developed an artificial intelligence (AI) algorithm capable of interpreting pig sounds, aiming to create a tool that can help farmers improve animal welfare.

The algorithm could potentially alert farmers to negative emotions in pigs, thereby improving their well-being, according to Elodie Mandel-Briefer, a behavioural biologist at University of Copenhagen who is co-leading the study.

The scientists, from universities in Denmark, Germany, Switzerland, France, Norway and the Czech Republic, used thousands of recorded pig sounds in different scenarios, including play, isolation and competition for food, to find that grunts, oinks, and squeals reveal positive or negative emotions.

While many farmers already have a good understanding of the well-being of their animals by watching them in the pig pen, existing tools mostly measure their physical condition, said Mandel-Briefer.

“Emotions of animals are central to their welfare, but we don’t measure it much on farms,” she said.

The algorithm demonstrated that pigs kept in outdoor, free-range or organic farms with the ability to roam and dig in the dirt produced fewer stress calls than conventionally raised pigs. The researchers believe that this method, once fully developed, could also be used to label farms, helping consumers make informed choices.

“Once we have the tool working, farmers can have an app on their phone that can translate what their pigs are saying in terms of emotions,” Mandel-Briefer said.

Short grunts typically indicate positive emotions, while long grunts often signal discomfort, such as when pigs push each other by the trough. High-frequency sounds like screams or squeals usually mean the pigs are stressed, for instance, when they are in pain, fight, or are separated from each other.

The scientists used these findings to create an algorithm that employs AI.

“Artificial intelligence really helps us to both process the huge amount of sounds that we get, but also to classify them automatically,” Mandel-Briefer said. — Reuters