A federal judge has declined to temporarily block Minnesota's new AI deepfake law targeting tools that can create realistic, nonconsensual nude images, allowing the first-of-its-kind restriction to take effect while xAI's broader legal challenge moves forward.
U.S. District Judge Donovan Frank rejected xAI's request for an emergency injunction, ruling that the company waited until just days before the law's launch to seek relief, NBC reported. The delay, Frank said, weakened xAI's argument that it faced immediate harm if the measure took effect.
The judge left open the possibility of revisiting the issue later, scheduling an Aug. 19 hearing to consider xAI's request for a preliminary injunction. xAI filed its lawsuit Monday, arguing the Minnesota law violates First Amendment protections and places unconstitutional limits on AI-generated content.
The law, signed in May by Minnesota Gov. Tim Walz, targets websites, applications and software platforms that allow users to create realistic "nudified" images of real people without consent. It also prohibits advertising tools that enable such content.
The statute defines a nudified image as one that has been digitally altered or generated to depict an intimate body part that was not present in the original image and appears realistic enough that a reasonable person would believe it belongs to the identifiable individual.
Violations carry significant financial penalties. The law allows civil penalties of up to $500,000 per unlawful access, download or use, along with additional damages and legal fees.
Enforcement authority rests with the Minnesota attorney general, and private individuals can also bring lawsuits.
Minnesota Attorney General Keith Ellison urged the court to reject xAI's emergency request, arguing the company's decision to wait until the last minute created a crisis of its own making.
"xAI's voluntary delay should not create a manufactured emergency for the Attorney General or the Court," Ellison wrote in a court filing.
xAI argued the law is overly broad and restricts protected speech. In its complaint, the company said, "The law is overinclusive and there are far less restrictive alternatives that function to achieve the same ends."
The company also said it already prohibits users from generating nonconsensual nude or sexualized images of people.
The lawsuit comes as xAI's Grok chatbot faces scrutiny over its image-generation capabilities. Grok's "Imagine" feature, which can create and edit images and video, has drawn criticism after reports that users were able to generate sexualized deepfakes at scale following a December model release. Apple later threatened to remove the app unless changes were made.
Free speech advocates have offered mixed reactions to Minnesota's approach. The ACLU of Minnesota said it supports protecting First Amendment rights around emerging technologies but argued the final version of the law went too far.
"The final version of the bill does not strike that balance," the group said.
The Foundation for Individual Rights and Expression (FIRE) also criticized the law, arguing that its broad language could sweep in protected parody and political expression. FIRE legislative counsel John Coleman said the measure could potentially cover "benign political memes," including altered images of public figures, and argued that such restrictions would face serious constitutional challenges.
"Americans have a First Amendment right to joke about, criticize, and parody public figures," Coleman said. "A law that reaches that expression deserves to be struck down by the courts."
Walz has defended the measure publicly, responding to the lawsuit with a post on X: "See you in court, creep."
Grok Faces Scrutiny
xAI has been under fire in the past for allegedly allowing users to generate deepfake images of minors. In March, three Tennessee teenagers filed a federal class-action lawsuit against the company, alleging its AI chatbot, Grok, generated sexualized images of them without their consent.
In January, Gov. Gavin Newsom condemned Musk's artificial intelligence company xAI, urging state authorities to investigate its chatbot Grok over the creation and spread of nonconsensual AI-generated sexual images involving children.
In a post on X, Newsom accused the company of enabling predators to exploit AI technology.
"xAI's decision to create and host a breeding ground for predators to spread nonconsensual sexually explicit AI deepfakes, including images that digitally undress children, is vile," Newsom wrote.
