Federal Judge Denies xAI's Bid to Block Minnesota's AI Nudification Ban

A federal judge in Minnesota has denied Elon Musk's xAI a bid to block a state law banning the creation of AI-generated fake nude images of real people. The September 4 ruling means the controversial statute, which took effect on August 1, can continue to be enforced while xAI's lawsuit against the state proceeds.

What the court ruled

Judge Donovan Frank, a Bill Clinton appointee, found that xAI had failed to show it would suffer irreparable harm if the law remained in force while the case proceeds. It is the company's second setback in the matter within a few weeks, as the court had already declined an earlier request to block the law before it took effect.

In his ruling, the judge wrote that Minnesota had enacted the law democratically and nearly unanimously, in response to undisputed harm caused by AI nudification technology. He also noted that xAI is a well-resourced, sophisticated party capable of acting quickly when its own interests are at stake, yet it waited three months after the governor signed the bill before filing suit.

The state enacted, democratically and nearly unanimously, a civil statute meant to protect the public from the undisputed harm caused by AI nudification technology. - Judge Donovan Frank, U.S. District Court for Minnesota

What the law requires

HF 1606, signed by Governor Tim Walz in May, is the first law in the United States to explicitly prohibit operators of websites, apps, and software from letting users turn real photos of identifiable people into nude or sexual content using AI. Each unlawful access, download, or use of such material carries a civil penalty of up to $500,000, on top of damages for emotional distress, statutory penalties, and legal costs. The bill passed the state Senate unanimously and drew only a single dissenting vote in the House of Representatives.

xAI sued the state on July 29, arguing the law violates the First Amendment's free speech guarantees. The company contended that its own policies already bar generating nude images without consent, and that building mechanisms to block such content specifically for Minnesota users would take time to design and test. The judge was unpersuaded, noting that the three-month gap between the bill's signing and the filing of the lawsuit undercut any claim of urgent, irreparable harm.

The Grok backdrop

Behind the dispute lies Grok Imagine, the tool that lets users generate images and video from text prompts. Earlier this year, Grok on the X platform drew criticism for generating undressed images of public figures, including Polish politicians and children, sparking outrage well beyond the United States. SpaceX, a Musk-affiliated company, has set aside more than $500 million to cover potential legal losses tied to Grok's modes known as Spicy and Unhinged.

Minnesota Attorney General Keith Ellison said the state would vigorously defend the law, stressing that generating such content, including material depicting minors, is unacceptable in his state. xAI has not commented publicly on the ruling but has already filed notice of its intent to appeal to the U.S. Court of Appeals for the 8th Circuit. In parallel, the state's motion to dismiss xAI's entire lawsuit is still pending.

What it means for the industry

The ruling carries weight beyond Minnesota, marking the first time a federal court has tested a law of this kind. Other states weighing similar rules can now point to a precedent in which a court found the public interest in curbing generative AI abuse to outweigh a tech company's arguments about the cost of building safeguards.

For AI companies offering image generation, including those operating in Europe and Poland, the case signals where local regulation may be headed: rather than waiting for nationwide or EU-wide legislation, individual states or countries may impose their own quickly enforceable bans with steep financial penalties. The outcome of the appeal before the 8th Circuit will be watched closely as a signal of whether such laws can survive free-speech challenges.