WSJ Tech News Briefing – TNB Tech Minute: Character.AI Starts Cutting Off Teen Users

Date: November 25, 2025
Host: Julie Chang for The Wall Street Journal

Episode Overview

This Tech Minute centers on Character.AI’s decision to restrict its chatbot service for users under 18, drawing from recent tragic events and ensuing regulatory scrutiny. The episode also covers significant updates from Best Buy’s quarterly performance and Chinese automaker BYD’s expansion in Europe, contrasting with Tesla’s declining sales.

Key Discussion Points & Insights

1. Character.AI Limits Teen Access

• Background:
  • Character.AI is a leading provider of roleplay and companion chatbots with approximately 20 million monthly users.
  • The company recently began restricting under-18s from accessing its chatbots, citing mental health concerns amid rising scrutiny.
• Catalyst:
  • The move follows the suicides of at least two teenagers after using Character.AI, sparking lawsuits and regulatory investigations.
• Transition Measures:
  • Previously, a daily 2-hour limit was implemented for all users last month.
  • As of yesterday, many users under 18 began losing full access.
  • Some “power users” are being given an extended grace period (1 hour per day) to adjust.
  • Character.AI is incorporating emotional support tools into its chatbots during this shift.

“Chatbot maker Character AI has started cutting off chatbot access for users under 18, citing mental health concerns.”
— Julie Chang [00:21]

“The decision follows the deaths of at least two teens who killed themselves after using Character AI chatbots, leading to lawsuits and regulatory scrutiny.”
— Julie Chang [00:34]

2. Best Buy’s Fiscal Third Quarter Update

• Performance Highlights:
  • Reported higher sales in fiscal Q3, with net income at $140 million (down from $273 million the prior year).
  • Sales rose to over $9.6 billion, outperforming Wall Street estimates.
• Reasons for Profit Dip:
  • The company has raised prices to offset tariffs, sparking concerns that cost increases could curb consumer demand.
• Analyst Outlook:
  • As of August, Best Buy expected tariffs might deter buyers but had not yet observed a consumer pullback.

“Best Buy reported higher fiscal third quarter sales and raised its full year outlook. The tech retailer posted a net income of $140 million, down from $273 million the year before.”
— Julie Chang [01:04]

3. BYD’s Rise & Tesla’s Challenges in Europe

• BYD’s Growth:
  • Chinese automaker BYD logged over 17,000 new car registrations in Europe last month, up from fewer than 6,000 in October 2020.
  • BYD continues to expand its market share in Europe amidst stiff home market competition.
• Tesla’s Decline:
  • EU registrations for Tesla fell 48% last month, worsening a trend of disappointing sales in 2025.
  • The decline is partially linked to Elon Musk’s involvement with the Trump administration, which ended earlier this year.

“New car registrations for BYD models... increased to over 17,000 vehicles from fewer than 6,000 vehicles in October 2020.”
— Julie Chang [01:43]

“Meanwhile, registrations for Tesla fell 48% in the EU last month... continuing the streak of disappointing monthly sales for the company this year.”
— Julie Chang [01:49]

Notable Quotes & Memorable Moments

• “Many users began losing access yesterday. The company said some power users will have an extended grace period of an hour a day to ease the transition. Character AI is also adding emotional support tools in its chatbots for this transition.”
  — Julie Chang [00:44]
• “Best Buy has raised prices on some items to offset tariffs, and analysts have said those price hikes could diminish consumer demand for its products.”
  — Julie Chang [01:18]
• “Tesla has been dealing with the fallout from Musk’s involvement with the Trump administration that came to an end a few months ago.”
  — Julie Chang [01:57]

Timestamps for Key Segments

• Character.AI cuts teen access & mental health backdrop: 00:21 – 01:02
• Best Buy Q3 earnings & market reaction: 01:04 – 01:29
• BYD European market surge & Tesla’s slump: 01:31 – 02:02

Summary Takeaways

• Character.AI’s move to restrict under-18s marks a pivotal response to tragic incidents and mounting attention on the potential mental health impact of AI companions.
• Best Buy shows strong sales despite profit decline, buffering against tariffs with price hikes but watching consumer behavior closely.
• The electric vehicle landscape in Europe is shifting, with BYD gaining ground and Tesla struggling amidst both market and political headwinds.