Recap: xAI has failed in its second attempt to kill off a Minnesota law that would ban AI-generated nudify apps in the state. US District Judge Donovan Frank denied the company's motion to block the first-in-the-nation rule on the grounds that xAI had failed to demonstrate it would suffer irreparable harm while its legal challenge proceeds.
On August 1, Minnesota banned apps and websites that allow users to generate non-consensual sexualized imagery. The companies behind these services can be fined $500,000 for each unlawful access or download of images that were altered to make someone appear naked or worse, which could add up to the hundreds of millions or even billions very quickly.
Fearing these punishments, xAI filed a lawsuit against the state in July. Musk's firm wrote that the law is an overbroad, content-based ban on free speech and the tools of visual expression in a "clumsy attempt to prohibit nudification." It noted that a business whose users generated 100,000 of these images would be charged $50 billion.
Frank denied a motion from xAI at the end of July that would have stopped the law from taking effect. On Friday, the judge denied a second motion, ruling that xAI failed to show it would suffer harm while pursuing its lawsuit.
"Because xAI has not demonstrated irreparable harm and the balance of harms tips steeply in favor of the State, xAI's motion for a preliminary injunction is denied," Frank wrote.
xAI says that the law is a violation of the First Amendment, and that it could count AI generations of shirtless men, harmless AI generations in swimwear, and satirical images as deepfakes. It claimed, as an example, that an AI-generated image it provides of Illinois Governor J.B. Pritzker and former New Jersey Governor Chris Christie as sumo wrestlers could be considered a violation.
Given xAI's history when it comes to this sort of thing, the lawsuit isn't a big shock. Its chatbot Grok made plenty of headlines at the start of the year for the thousands of "undressing" deepfakes it was generating every hour, including images of minors.
xAI also says that it has been punishing any of its users who use Grok to create child-exploitation images. It claims to have suspended 52,222 accounts and made 73,604 reports to the National Center for Missing & Exploited Children (NCMEC) in 2026, resulting in at least 244 arrests.
xAI emphasizes that it strictly prohibits its users from generating nude or sexualized images of people without their consent. But there's no denying that launching a lawsuit against a state over an anti-deepfake law isn't a good look.