Musk's xAI sues Minnesota over AI nudification ban, warns of $50B liability

Elon Musk's AI company xAI has filed a lawsuit against the state of Minnesota over a law banning so-called "nudification" technology — tools that use AI to generate nude images of real people — on websites and apps.

According to AP and CNBC, xAI filed the suit in federal court on Monday, just before the law was set to take effect. Minnesota passed the legislation in May, and it is scheduled to take effect Saturday.

xAI's chatbot and image generator Grok offers such services on X, formerly Twitter, and other platforms.

In its complaint, xAI said it does not object to the state's goal of prohibiting the non-consensual distribution of nude images of real people. However, it argued that the Minnesota law goes far beyond that purpose, broadly restricting constitutionally protected expression and imposing penalties of up to $500,000 per violation.

The company also said the law contains no provision to protect companies that make good-faith efforts to prevent misuse, even when users circumvent safety measures to generate such images.

xAI further argued that the law covers images made with a subject's consent or by the subject themselves, and that its definition of "intimate body parts" is so broad it encompasses areas of the body routinely exposed in public.

xAI said that if violations reached 100,000 cases, theoretical damages could total $50 billion.

Minnesota Attorney General Keith Ellison said in a statement Tuesday that "creating AI-generated nude images of someone without their consent is horrific," adding, "There are plenty of AI policy debates worth having — this isn't one of them."

He went on to say that "AI nudification tramples on victims' dignity and can cause enormous emotional, personal and professional harm."

Minnesota Gov. Tim Walz posted on his X account Wednesday to taunt Musk directly, writing: "See you in court, creep."

xAI previously filed a similar lawsuit challenging California's deepfake regulation, which a court blocked after finding it conflicted with First Amendment free speech protections.

Earlier this year, xAI also stated that it maintains a "zero-tolerance policy" toward child sexual exploitation, non-consensual nude imagery and unwanted sexual content.

The Minnesota lawsuit comes amid a class-action suit in which xAI faces allegations that Grok was used on its platform to generate sexual images — including child sexual abuse material — based on photos and videos of real individuals.

Influencer Ashley St. Clair has also sued xAI, alleging that Grok created and distributed nude and explicit images of her. xAI has filed a countersuit against her in Texas, claiming she violated its terms of service.

xAI is currently owned by SpaceX, the space company led by Elon Musk.