xAI (now Space XAI after merging with Elon Musk's SpaceX) has filed a lawsuit against Minnesota Attorney General Keith Ellison challenging a new state law banning "nudify" apps that generate nonconsensual intimate images. The law, signed by Gov. Tim Walz and set to take effect in August 2026, would impose fines of $500,000 per violation on developers whose tools create sexual deepfakes.

In its complaint, xAI argues the law is an "overbroad, content-based ban on free speech" that extends beyond preventing nonconsensual deepfakes to chill protected expression. The company acknowledges the state's interest in prohibiting such content but claims the statute exposes "a wide array of protected speech to civil liability." xAI notes it already prohibits generating nude images without consent and has sued users who bypass its safeguards, including a South Carolina user who used Grok to create nonconsensual imagery of adults and minors.

The company faces investigations from California, UK's Ofcom, the European Commission, and Ireland's Data Protection Commission over its image-generation capabilities. xAI warns the law would force it to restrict Grok Imagine's editing features when the statute takes effect. Ellison responded on X that "AI nudification robs the target of their dignity," while Walz posted: "See you in court, creep."