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Endpoints News
Thursday, 10 July 2025
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As generative AI use has increased in the last few years, so has the use of therapy chatbots. There are startups built around AI-powered therapists, and older companies are developing their own tools. 
Recently, I spotted something that made me wonder if all of it could grind to a halt. 
The Illinois legislature in May unanimously passed a bill that would bar AI from calling itself a therapist and doing things like interacting with patients directly, making decisions about care or detecting patients’ emotional and mental states. It’s the first regulation of its kind in the US.
I spoke with companies who’ve staked their future on using AI for therapy to see if (or how) they plan to pivot, and what kind of future they see for a new concept that’s just taking off. 
While all agreed with the bill's intention to make therapy safer, some pointed out that it couldn't stop people from using ChatGPT or Meta's chatbots as their therapist. Instead, the bill could discourage health tech companies trying to build safer alternatives. Read more from my reporting here.
- Ngai
Here’s what’s new
A state bill threatens to ban AI therapists, forcing health tech startups to pivot
AI ther­a­pists could soon be banned for the first time in the US un­der an Illi­nois bill, leaving mental health companies scrambling to comply. The bill would restrict how some mental health tech companies operate, especially as AI-powered therapy has become more mainstream and attracted more funding in recent years.
Aqtual raises $31M to guide rheumatoid arthritis treatments
The di­ag­nos­tics com­pa­ny raised $31 mil­lion to help de­vel­op its test that's de­signed to pre­dict how pa­tients re­spond to rheuma­toid arthri­tis drugs.
AI’s ascendance
A chart from Rock Health shows funding for AI startups since 2020.

Startups that involve AI made up 62% of the total funding raised by healthcare companies in the first half of 2025, according to a Rock Health report. That puts funding for AI startups on pace to exceed 2023 and 2024’s total raised. 

This week in health Тech
Federal investigators are asking doctors about how UnitedHealth Group records diagnoses, the Wall Street Journal reported. The Journal reported in May that the healthcare giant faces a criminal investigation from the Department of Justice related to possible Medicare fraud. In response to the article, UnitedHealth said in its own statement that it plans to launch a “regular, independent third-party coding oversight and audit process.” The company also said that a similar decade-long “challenge” by the DOJ didn’t find evidence that UnitedHealth had been overpaid.
Hims is going to expand into Canada in 2026, timing it with the arrival of generic semaglutide. Novo Nordisk let its patent there lapse, opening the door for other drugmakers to launch their own generic versions of the GLP-1.
Samsung Electronics is buying Xealth, a startup that helps providers prescribe digital health services like remote patient monitoring and apps. Xealth spun out of the West Coast-based health system Providence.
Progyny said it expects second-quarter earnings will be better than it initially expected, based on the pace of member activity. It reports on August 7. 
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