Elon Musk's xAI loses court bid in Minnesota "nudification" ban

A federal judge has upheld Minnesota’s ban on AI tools that can transform photos of real people into nude images and media, rejecting a bid by Elon Musk’s xAI to halt the statute while the company’s free-speech challenge plays out. The decision allows regulators to commence the fines of up to $500,000 per image right away.

U.S. District Judge Donovan Frank denied xAI’s request for a preliminary injunction, an order that would have suspended the law till the end of the lawsuit. Judge Donovan considered what he called the “balance of harms,” and found that “public interest tips steeply in favor of the State,” according to the memorandum quoted by CBS Minnesota.

The judge described a “civil statute aimed at protecting the public from the undisputed harm stemming from AI-nudification technology,” and said the statute was passed “democratically and nearly unanimously.” He was candid that the underlying First Amendment questions were, however, still complex, because of the context of a new technology, believing the case would be settled as it moves forward. For now, though, the ban remains upheld.

Last-minute filing undercuts xAI’s case

Minnesota’s legislature approved the bill this spring, and the governor appended his signature. However, xAI did not sue until July 27, which was about three months later and days before the August 1 start date. The AI company sought a temporary restraining order on July 29, which Judge Frank turned down on July 31.

This gap became even more evidence against xAI. “If xAI genuinely feared irreparable harm, the Court does not doubt it would have acted more quickly to file this action and move for injunctive relief,” Frank wrote.

In other words, a company racing to avoid catastrophe does not wait until the eve of enforcement to ask a court for help.

Extent of the law and the costs

The statute, known as HF 1606, is the first of its kind in the entire country. It bars a provider from letting users generate realistic images that add intimate body parts absent from an original photo of an identifiable person, and also bars them from producing such an image on any user’s behalf.

Each violation carries a civil penalty of up to $500,000, and people depicted in these images can bring their individual claims for damages.

The federal Take It Down Act and a 2025 Texas approach towards deepfakes all depend on whether the maker knew the image was nonconsensual. Minnesota has completely removed that requirement, so a provider can be liable even without knowledge that a nude image was created.

This provision within the statute is the exact area xAI is against. The bill cleared the House 132-1 and the Senate 65-0 after reports of a man who used social-media photos to fabricate sexual images of more than 80 women he knew.

The scale behind Grok Imagine

Attorney General Keith Ellison, who defended the signed statute, stated that the ruling was a win for residents of Minnesota. “I am extremely proud to be defending this law, and along with it, the dignity of the people of Minnesota,” he said, adding that the statute continues to stop products like xAI’s Grok Imagine from generating sexualized images.

According to a report referenced in the ruling, Grok produced about 3 million sexualized images in the 11 days after a new image-editing feature launched, including about 23,000 that appeared to depict children. Cryptopolitan had previously reported that xAI, defending its record, said it suspended 52,222 accounts this year and filed 73,604 reports with the National Center for Missing and Exploited Children.

xAI’s attorneys have now filed notice that they will ask the 8th Circuit Court of Appeals to review the injunction denial. In earlier arguments, the company proposed the suspension of features for Minnesota users instead of risking any fines.

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