Elon Musk’s artificial intelligence company xAI has taken Minnesota to federal court over a new law targeting online tools that generate fake nude or sexualized images of real people.
CNBC reported that xAI is seeking to stop Minnesota from enforcing its ban on so-called “nudify” apps, escalating a broader conflict over whether states can impose restrictions on generative AI products.
CBS News Minnesota reported that the first-of-its-kind measure was signed by Gov. Tim Walz earlier in 2026 and is scheduled to take effect in August.
xAI Claims the Law Restricts Protected Expression
xAI filed its complaint on Monday in federal court against Minnesota Attorney General Keith Ellison.
The company argues that House File 1606 imposes an excessively broad restriction based on the content of images and interferes with tools used for visual expression.
xAI’s position does not deny that states have an interest in preventing people from distributing AI-generated nude images of others without permission. Instead, the company argues that Minnesota’s approach reaches beyond nonconsensual sexual deepfakes and could expose other forms of AI-generated imagery to legal penalties.
xAI believes the law could impose liability even when a provider prohibits nudification, installs safeguards to block it or responds to users who attempt to bypass those protections.
Consent and Creative Uses Enter the Dispute
The lawsuit also challenges the situations covered by the statute.
xAI says a provider could still face liability when the person shown in an image gave consent or when the material carries artistic, scientific, political, satirical, educational, medical or religious value.
The company further argues that Minnesota’s definition of an “intimate part” is broad enough to cover images of shirtless men, people wearing shorts or swimsuits, and other depictions that may not ordinarily be regarded as nudification.
These arguments place the court dispute at the intersection of two competing concerns: preventing technology-enabled sexual abuse and avoiding restrictions that sweep in lawful expression.
Minnesota Law Gives Victims a Legal Path
CBS News Minnesota explained that House File 1606 prohibits access to technologies designed to transform images into fake sexualized depictions.
The law also establishes a pathway for victims and the Minnesota attorney general’s office to pursue companies that provide these AI tools.
Rather than focusing only on people who distribute manipulated images, Minnesota is attempting to extend accountability to the services that make their creation possible.
Walz and Ellison Defend the Ban
CBS News Minnesota quoted Ellison as describing the nonconsensual creation of AI nude images as appalling and harmful to a target’s dignity, emotional well-being, personal life and career.
Ellison said his office was waiting to receive the lawsuit formally and would respond in court.
Walz delivered a much shorter public response, writing, “See you in court, creep.”
xAI Seeks to Block Enforcement
CNBC reported that xAI wants the court to prevent Minnesota’s ban from taking effect.
The company is asking the court to declare the statute unconstitutional and issue an order barring the state from enforcing it.
The case could help determine how far states may go when regulating AI tools capable of both protected creative uses and serious nonconsensual harm. Its outcome may also influence similar legislation as governments seek ways to address sexual deepfakes without violating constitutional speech protections.
