Elon Musk’s artificial-intelligence company, xAI, has sued Minnesota over a new law restricting technology that can create realistic nude images of identifiable people. The company argues that the law is written too broadly and violates the First Amendment by banning protected forms of visual expression.
Musk is not personally named as the plaintiff. The lawsuit was filed by xAI against Minnesota Attorney General Keith Ellison in federal court on July 27, 2026. It seeks to prevent the state from enforcing the law when it takes effect on August 1. No court has yet ruled that the Minnesota law is unconstitutional.
What Does Minnesota’s New Law Prohibit?
The disputed law is Minnesota Chapter 72, originally introduced as House File 1606. It applies to websites, applications, software and other services that allow users to “nudify” an image or video.
Under the law, nudification occurs when technology alters or generates an image to show an intimate body part that did not appear in the original material. The resulting image must be realistic enough for a reasonable person to believe that the depicted body part belongs to an identifiable individual.
Companies are prohibited from allowing users to access or use their services for this purpose. The law also bans advertising or promoting services that perform nudification. It contains an exception when the process requires substantial technical or artistic skill from the user.
What Penalties Could Companies Face?
A person depicted in an image created in violation of the law may bring a civil lawsuit. Available remedies can include compensation for emotional suffering, up to three times the person’s actual damages, punitive damages, legal fees and an order stopping the conduct.
The Minnesota attorney general can also enforce the law. A company or person may face a civil penalty of up to $500,000 for each unlawful access, download or use.
The law does not guarantee every claimant a $500,000 payment. That amount is the maximum civil penalty available in an enforcement action, while compensation in a private lawsuit would depend on the claimant’s losses and the court’s decision.
Why Is xAI Challenging the Law?
xAI claims the statute creates an overly broad, content-based restriction on speech. The company accepts that Minnesota has a legitimate interest in preventing people from creating and distributing non-consensual sexual images. However, it argues that the law reaches far beyond that objective.
According to the complaint, the statute could apply even when the person shown in an image consented to its creation or created the image personally. xAI also argues that the law does not adequately protect images created for political commentary, satire, art, medicine, science, education, religion or other lawful purposes.
The company says its Grok and Grok Imagine services can generate many forms of visual expression. It argues that blocking every possible image that might fall within Minnesota’s definition would also prevent users from producing lawful content.
Does xAI Allow Non-Consensual Nude Images?
xAI says its existing policies prohibit users from creating nude or sexualised images of real people without permission. It also claims to use technical safeguards against such misuse and has taken legal action against users accused of bypassing those controls.
The lawsuit argues that Minnesota’s law can still impose liability on an AI provider despite strong moderation systems. According to xAI, the statute does not provide a clear protection for companies making good-faith efforts to stop unlawful images.
These statements represent xAI’s legal position. The court has not yet determined whether its safeguards are sufficient or whether the Minnesota law actually imposes unconstitutional liability.
Why Did Minnesota Pass the Law?
Minnesota lawmakers say AI nudification technology can be used to create highly realistic sexual images of adults and children from ordinary photographs posted online. Supporters argue that the harm occurs when the images are created, not only when they are later published.
The bill received overwhelming bipartisan support, passing the Minnesota House by 132 votes to one and the Senate unanimously by 65 votes to zero. Governor Tim Walz signed it on May 7, 2026. Attorney General Keith Ellison has promised to defend the law. He said generating nude images of people against their will can seriously damage their dignity and cause emotional, personal and professional harm.
What Happens Next?
xAI is asking the federal court to declare the statute unconstitutional and block Ellison from enforcing it. Because the effective date is approaching, the company may also seek a temporary restraining order or preliminary injunction while the broader case continues.
Minnesota will have an opportunity to argue that the law is properly focused on harmful technology and is sufficiently narrow to survive First Amendment review.
As of July 31, 2026, the court had not issued a publicly reported ruling. The case could become an important test of how far states may go in regulating AI tools before their use results in the public distribution of harmful deepfake content.