Elon Musk’s company xAI has sued Minnesota over the state’s law banning “nudification” technology on websites and apps, setting up a potential constitutional test for how far states can go to regulate artificial intelligence. 

Musk’s companies sued the federal court Monday, days before the law was set to take effect on Saturday, which would have made Minnesota the first U.S. state to ban the use of AI to generate fake nude images of real people. The bill was signed in May by Democrat Gov. Tim Walz.

In a 38-page lawsuit, xAI said that while it does not dispute the state’s interest in banning the distribution of AI-generated nude images without people’s consent, Minnesota’s law “extends far beyond that goal.” The lawsuit argued that it also banned constitutionally protected images and videos because of overly broad provisions, fining the company $500,000 per violation. 

The lawsuit argued that there was no “safe harbor” provision in the law, measures to protect a company if they made good-faith efforts to prevent such images from being generated by users, and that it included images that were consented by the person depicted or created by them. 

It also argued that the law’s definition of “intimate part” was too broad.

Minnesota lawmakers invoked Statute Section 609.341, Subdivision 5, from the state’s existing criminal sexual conduct laws for this bill. Under that statute, “intimate parts” is defined as “the primary genital area, groin, inner thigh, buttocks, or breast of a human being.”

Minnesota Attorney General Keith Ellison, also a Democrat, said in a statement that his office had not yet been served the lawsuit or seen it, according to The Associated Press.

“But I know that using AI to generate nude images of people against their will is appalling," he said. "There are plenty of worthy debates to have about AI policy. This is not one of them. AI nudification robs the target of their dignity and can cause immense harm on an emotional, personal, and professional level."

As a comparison, state laws over election deepfakes have had mixed court results. California’s law to ban the creation of election-related deepfakes was blocked for violating the First Amendment and free expression, while the legal battle over Minnesota’s political deepfakes ban is ongoing after Musk’s 2025 court challenge.

State and federal laws that ban deepfakes typically penalize users who make these images, such as the federal Take it Down Act passed last year that has websites and apps take down such images. Minnesota’s new law would effectively target the tech companies that build the tools including its $500,000 fine. 

In the lawsuit, xAI said that the terms of service for Grok prohibited usage for “any illegal, harmful, or abusive activities” that violate privacy, such as altering their image to depict them in a sexually explicit image, which it said it enforced through account suspensions or terminations and reporting child sexual abuse content.

After a global backlash over Grok’s “spicy mode” tool being used to generate sexualized images of women and children without their consent, Grok said in January that it would geoblock content if it violated the laws of that country, preventing editing sexualized photos of real people in places where it is illegal. 

xAI’s Acceptable Use Policy effective as of June 26, 2026, states that it prohibits “Using the Service in a way that infringes, misappropriates or violates a person’s privacy or their right to publicity, including by: Undressing or nudifying real persons, or otherwise altering a real person’s image or likeness to depict them in an intimate or sexual context,” where violating these policies could result in account suspension or termination.