Elon Musk’s xAI challenges Minnesota law targeting AI ‘nudify’ apps

Published 29 July 2026 · tech

Elon Musk’s artificial intelligence company xAI, now owned by SpaceX, has filed a lawsuit against Minnesota Attorney General Keith Ellison, challenging a new state law

Elon Musk’s artificial intelligence company xAI, now owned by SpaceX, has filed a lawsuit against Minnesota Attorney General Keith Ellison, challenging a new state law that seeks to ban so-called “nudify” apps, CNBC reported. The legislation, which takes effect on Saturday, targets websites and applications that enable users to create non-consensual sexually explicit AI-generated images. It imposes fines of $500,000 for every explicit deepfake created through such platforms. Passed in April, the law was championed by Minnesota state Senator Erin Maye Quade after learning that a man had used social media photos of more than 80 women he knew to generate sexualized images and videos without their permission. In their complaint, attorneys for xAI wrote: the statute “imposes an overbroad, content-based ban on free speech and the tools of visual expression in a clumsy attempt to prohibit ‘nudification.’” xAI contends that the law violates First Amendment protections and imposes excessive financial penalties.

The company argued that if users generated 100,000 prohibited images, a platform could face fines totalling an “eye-popping $50 billion.” Maye Quade previously told CNBC that the legislation is comparable to long-standing laws banning voyeuristic acts such as secretly taking explicit photographs through windows, arguing that the law is designed to address a modern technological equivalent. The AI company, now operating under the name SpaceXAI, is also facing a proposed class-action lawsuit alleging that its Grok chatbot and image-generation tools were used to create and distribute child sexual abuse material (CSAM) by manipulating real photos and videos of the plaintiffs. The lawsuit further claims the company failed to provide authorities with information about individuals who allegedly used Grok to "nudify" victims' images. In response, Musk’s company said it strictly prohibits the creation of nude or sexualized images of individuals without their consent.

It added in its Minnesota complaint that it has taken legal action against users who bypass its technological safeguards to generate such content. The lawsuit follows a similar legal challenge filed by the company against a California law aimed at curbing AI-generated deepfakes. In that case, a federal judge partially sided with the company by striking down provisions that restricted the use of AI-generated deepfakes during election campaigns. UK MP sues xAI, seeks court order to block AI-generated fake sexual images A British lawmaker who is suing Elon Musk's xAI over fake sexualised images allegedly created using its Grok AI platform is seeking a court order to prevent the chatbot from generating any non-consensual sexualised images of her, Reuters reported on Tuesday. Also Read | Elon Musk doubles down on Grok Imagine after OpenAI's Sora shutdown Jess Asato, a member of the UK's governing Labour Party, said last month that users produced fabricated images of her after she publicly criticised Musk and Grok.