If you’re thinking of buying your kid a talking teddy bear, you’re likely envisioning it whispering supportive guidance and teaching about the ways of the world. You probably don’t imagine the cute plush toy engaging in sexual roleplay—or giving advice to toddlers about how to light matches.

Yet that’s what the consumer watchdog Public Interest Research Group (PIRG) found in a recent test of new toys for the holiday season. FoloToy’s AI teddy bear named Kumma, which uses OpenAI’s........

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