Court Denies xAI's Request to Block First AI Service Ban in the US for 'Undressing' People

• xAI was unable to block the first ban in the US on AI-<>.
• Elon Musk's company filed a motion in court regarding Minnesota's law against generating nude deepfakes and was denied.
• This case could set a precedent for the entire generative AI industry.

A federal court in the US denied Elon Musk's xAI company a request for a temporary block on Minnesota's law, which is the first regulatory act in the country prohibiting the generation or editing of images that add nudity without a person's consent.

<<xAI filed the motion on July 29, 2026 --- nearly three months after the law was signed and just three days before it was set to take effect. Such a delay in filing the lawsuit and motion indicates that the harm is not immediate>>, the court ruling stated.

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At the same time, the court did not rule out the possibility of revisiting this issue later. A hearing on the motion for a preliminary injunction is scheduled for August 19.

xAI believes the law is too broad

xAI did not dispute the state's right to combat services used to create intimate deepfakes without a person's consent, but stated that the law violates the First Amendment of the US Constitution regarding freedom of speech, according to NBC News.

The document states:

<<The law is too broad, and there are significantly less restrictive alternatives that would achieve the same goal>>.

xAI also emphasized that it already prohibits users from <>.

The company also claims that the new rules could create legal risks even in cases where:

• a person has consented to the creation of the image;
• they created it themselves;
• the content was never published;
• the image has artistic, satirical, educational, scientific, medical, or political value.

The law was passed after scandals surrounding Grok

The new Minnesota law was signed by Governor Tim Walz in May 2026. The document prohibits website, app, or software owners from allowing users to create so-called nudified images, as well as advertising related features.

Under nudified content, the law understands images or videos that have been altered or generated in such a way that they display intimate body parts not present in the original, if the result is so realistic that an average person would perceive it as real.

Violations of the law entail:

• civil fines up to $500,000 for each instance of illegal access, use, or upload;
• compensation for moral damages;
• punitive damages;
• reimbursement of legal costs.

However, the law does not establish criminal liability.

Minnesota Attorney General Keith Ellison urged the court to reject xAI's request, stating that the company created an <> by approaching the court only three months after the law was passed.

After the lawsuit was filed, Governor Tim Walz briefly reacted on social media X:

<<See you in court, weirdo>>.

The Grok scandal intensified the debate over AI regulation

xAI's lawsuit is a continuation of a series of scandals surrounding the Imagine feature of the Grok chatbot. After the model's launch in late December 2025, users began to massively create sexualized deepfakes of real people without their consent, leading to international criticism and investigations in several jurisdictions.

In January 2026, according to media reports, Apple threatened to remove Grok from its app store if xAI did not tighten restrictions. Despite this, as early as April, users were finding ways to bypass the protective mechanisms established by the company.

In light of these events, the European Commission has already initiated an official investigation into the activities of the X platform for possible violations of the Digital Services Act (DSA) related to the use of Grok for creating sexualized images.

At the same time, xAI's case has received mixed reactions from human rights organizations. The American Civil Liberties Union of Minnesota (ACLU Minnesota), which initially supported the bill, opposed the final version after it was revised.

<<While we believe that creating technology to alter or 'undress' photographs of recognizable people is protected by the First Amendment, we also recognize that creating and distributing such materials without consent can cause serious harm to individuals>>.

Additionally, collective lawsuits have already been filed against xAI and its parent company, in which plaintiffs claim that Grok created or distributed their nude deepfakes, including images of minors. One of the latest was a lawsuit from a British MP.

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