xAI sues Minnesota over AI nudification law before Aug. 1 start

xAI is asking a federal court to block the xAI Minnesota AI law fight from becoming a live compliance problem this week. Elon Musk’s artificial intelligence company sued Minnesota Attorney General Keith Ellison on Monday, arguing that HF 1606, the state’s new law targeting AI “nudification” tools, violates the First Amendment.

The case matters beyond one company because it tests how far states can go in policing AI image generators. For investors watching AI platforms, the lawsuit is another reminder that product risk now includes state-level rules, civil penalties and court battles over what AI systems are allowed to create.

What is Minnesota’s AI nudification law?

HF 1606 targets software that uses artificial intelligence to make realistic sexualized images of real people, including images that digitally remove or alter clothing. The law makes platforms strictly liable, meaning they can be held responsible regardless of whether they knew about or intended a user’s output, according to xAI’s complaint filed in the U.S. District Court for the District of Minnesota.

Under the law, each generated image can carry a civil penalty of up to $500,000, according to the complaint. xAI says the statute does not give platforms a “safe harbor,” or legal protection, for efforts to block prohibited content through policies, filters or enforcement.

The company says it is not challenging Minnesota’s basic goal of stopping nonconsensual intimate AI images. In the complaint, xAI says it does not dispute the state’s interest in preventing the spread of artificial nude images of real people without consent. Its argument is that HF 1606 reaches too far and can punish protected expression.

xAI points to the law’s definition of “intimate part,” which the company says Minnesota took from a criminal sexual-contact statute. The complaint says that definition includes areas such as the inner thigh, buttocks and breast, creating potential liability for AI images involving swimsuits, shirtless public figures or beach scenes, even when the image is political satire or otherwise lawful speech.

Why is xAI suing Minnesota?

xAI says HF 1606 imposes liability even when a person consents to the image, creates the image themselves or never shares it, according to the complaint. The company also argues the law lacks a scienter requirement, a legal term meaning proof that someone knew they were doing something wrong.

That point is central to the platform-risk argument. xAI says a user who evades company safeguards could still create legal exposure for the company, even if the platform tried to prevent the output.

The complaint says xAI suspended more than 50,000 accounts in 2026 and filed more than 70,000 reports with the National Center for Missing & Exploited Children, which xAI says led to at least 244 arrests. The company argues those enforcement actions would not protect it from liability under HF 1606.

Minnesota lawmakers passed the bill after a man used social media photos to create sexual images of more than 80 women he knew, according to legislative debate cited around the measure. The House approved HF 1606 by a 132-1 vote, and the Senate passed it 65-0. State Senator Erin Maye Quade, who championed the bill in the Senate, said the law’s ban on consensual images was intentional.

Ellison defended the law after xAI sued. “AI nudification robs the target of their dignity and can cause immense harm on an emotional, personal, and professional level,” he said.

xAI also contrasts Minnesota’s approach with the federal TAKE IT DOWN Act, signed by President Donald Trump in May 2025. According to xAI, the federal law covers nonconsensual intimate deepfakes but requires proof of nonconsent and distribution, uses a narrower definition of covered body parts and includes exceptions for educational and medical material.

HF 1606 is set to take effect Aug. 1. xAI wants a federal judge to stop enforcement before then.

This story draws on original reporting from Decrypt.