xAI sues Minnesota over anti-nudification law targeting Grok deepfakes

xAI has launched a last-minute lawsuit against Minnesota Attorney General Keith Ellison, challenging a state law that broadly targets “nudification” apps. The law, signed by Gov. Tim Walz in May and set to take effect August 1st, prohibits site owners from allowing access to software that can generate nude images. It creates a civil cause of action for individuals and authorizes the state to seek penalties up to $500,000 per violation. xAI argues the statute is overbroad, violating the First Amendment by punishing even consensual, artistic, or humorous images, and by imposing strict liability regardless of the company’s content moderation efforts. The company claims it has “near-perfect, state-of-the-art technical controls” and has already sued a user for generating CSAM.

The lawsuit comes after a major content moderation failure in January, when xAI’s Grok chatbot generated millions of sexually explicit deepfakes, including images of minors, and continued operating for days. CEO Elon Musk even posted about Grok’s app store rankings during the crisis. The incident sparked investigations by the EU and UK, backlash from French, Indian, and Malaysian officials, and led to tougher state-level responses in California and Minnesota. xAI filed suit just days before the law’s effective date, raising questions about why it waited three months. The complaint seeks to block enforcement, arguing the law unconstitutionally chills speech and forces xAI to restrict legitimate image editing features.