Minnesota’s governor responded to the lawsuit with three words: “See you in court, creep.” That’s not a typical line from a legal dispute over AI regulation, but this is not a typical case. xAI, now officially rebranded as SpaceXAI following its merger with Elon Musk’s rocket company, has filed a lawsuit against Minnesota Attorney General Keith Ellison, targeting a state law that would ban apps and websites capable of generating nonconsensual intimate images. As reported by Engadget, the law is the first of its kind in the United States and is set to take effect on August 1, 2026.
The law doesn’t just ban the images themselves. It would fine developers $500,000 every single time a user generates a nonconsensual adult deepfake using their product. xAI says that’s essentially an impossible financial exposure, arguing it would have “no practical choice” but to heavily restrict Grok Imagine’s image-editing features the moment the law kicks in. In its complaint, the company frames the law as an “overbroad, content-based ban on free speech,” claiming it sweeps up protected expression well beyond what Minnesota actually intended to prohibit.
Here’s the problem with that argument. xAI spent the early part of 2026 at the center of multiple investigations after reports showed its platform was letting users turn photos of real women and children into sexualized images. California regulators, the UK’s Ofcom, the European Commission, and Ireland’s Data Protection Commission all launched probes. Even after xAI put safeguards in place, researchers found the system still allowed users to undress people in images. So when the company now presents itself as a responsible actor being punished by clumsy legislation, that framing deserves serious scrutiny.
xAI does make some narrower points worth considering. It says it already prohibits nonconsensual intimate imagery under its own policies and has actually sued a user from South Carolina for using Grok to generate such images of real adults and minors. The company argues Minnesota’s law goes far beyond stopping abuse and instead creates sweeping civil liability for tools that also have legitimate uses. That’s a real legal question, and courts will have to weigh it.
But the broader context matters here. This is a company asking a court to strike down the country’s first state-level law specifically targeting AI nudification tools, while its own platform has a documented history of being used for exactly what that law is designed to stop. Whether or not the law is perfectly written, the push to block it before it even takes effect sends a clear message about where xAI’s priorities sit. Attorney General Ellison put it plainly: “AI nudification robs the target of their dignity and could cause them immense harm.” That’s not a complicated concept, whatever the First Amendment arguments may be.