Welcome back to Daily Zaps, your regularly-scheduled dose of AI news ⚡️ 

Here’s what we got for ya today:

• AI therapy apps get banned

• GPT‑5 rollout backlash

• ChatGPT’s model picker is back

• $1B in ARR vibe coding app

Let’s get right into it!

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GOVERNMENT

Illinois bans AI therapy

Illinois has enacted the Wellness and Oversight for Psychological Resources (WOPR) Act, making it one of the first states to set legal limits on AI in mental health care. Signed by Gov. JB Pritzker, the law bans AI-driven apps or services from performing therapeutic decision-making—such as diagnosing users—while still allowing AI for administrative support like note-taking. Violators face fines up to $10,000.

The move follows concerns from mental health professionals that unregulated AI tools could misrepresent clinical expertise and put the public at risk, especially as some users have reported harmful effects, including “AI-induced psychosis.” The law distinguishes between wellness apps like Calm, which remain legal, and therapy-like services, prompting some providers, such as Ash Therapy, to block Illinois users until regulations are finalized.

BIG TECH

GPT‑5 rollout backlash

The launch of OpenAI’s GPT-5, intended as a significant advancement in ChatGPT’s capabilities, has instead generated substantial backlash among users. As part of the rollout, eight legacy models—including GPT-4o, o3, o3-Pro, and 4.5—were removed without prior notice. The update also eliminated the model picker, replacing it with a routing system that automatically selects a sub-model for each request.

While OpenAI positioned GPT-5 as offering improved writing and coding performance, many users reported that responses were shorter, less nuanced, and more corporate in tone compared to previous versions. Communities such as r/ChatGPT and r/MyBoyfriendIsAI documented widespread dissatisfaction, with users describing GPT-4o in particular as more personable and better suited for creative work, emotional support, and conversational engagement. Some subscribers reported canceling their Plus plans, citing disruption to established workflows that relied on the distinct strengths of multiple models.

In response to the criticism, CEO Sam Altman announced that GPT-4o would be reinstated as an option for Plus users and committed to increasing transparency regarding which model is in use, as well as raising usage limits. While the decision addresses immediate concerns about access, the episode highlights the importance of maintaining user choice and continuity in AI tools that serve both professional and personal needs.

BIG TECH

ChatGPT’s model picker is back

OpenAI’s launch of GPT-5 aimed to simplify ChatGPT by replacing the model picker with an automatic “router” that would choose the best AI for each query, but user backlash and technical hiccups have complicated the rollout. CEO Sam Altman has now introduced three selectable modes Auto, Fast, and Thinking while also restoring access to deprecated models like GPT-4o, GPT-4.1, and o3, following strong demand from users attached to their personalities and response styles.

GPT-5’s router faced performance issues on launch day, and feedback suggests it hasn’t met expectations for all users. OpenAI acknowledges the challenge of aligning model behavior to individual preferences, and is working on warmer, customizable personalities. The situation highlights the growing human attachment to specific AI models, with some users even holding symbolic “funerals” for retired systems, underscoring that technical optimization alone won’t satisfy the emotional and stylistic preferences of ChatGPT’s diverse user base.

STARTUPS

$1B in ARR vibe coding app

Swedish AI-powered “vibe coding” startup Lovable, founded in 2023, has rapidly grown into one of Europe’s top tech stars, reaching unicorn status and surpassing $100 million in annual recurring revenue (ARR) just eight months after launch. With over 2.3 million active users, 180,000 paying subscribers, and only 45 full-time employees, the company adds at least $8 million in ARR each month, expects $250 million by year-end, and projects $1 billion within 12 months. Revenue is largely subscription-driven, with major customers like Klarna, HubSpot, and Photoroom.

While enterprise adoption remains limited, Lovable is targeting that market with a new Business tier offering features like SSO, private projects, and data privacy controls—positioned between its Pro and Enterprise plans—to expand beyond prototyping use cases. Despite its growth, the company has made unconventional decisions, such as voluntarily cutting $1.5 million in ARR by moving Team-tier users to a cheaper plan to improve accessibility.