xAI Lawsuit Tests Minnesota’s $500,000 Deepfake App Ban
xAI challenged Minnesota’s incoming “nudify” app law, turning a state penalty system for non-consensual explicit deepfakes into a federal speech and platform-liability fight.
Minnesota’s ban on nudify apps carries a $500,000 fine for each prohibited explicit deepfake, according to CNBC.
Before the law takes effect on Saturday, xAI has gone to federal court to stop it.
Elon Musk’s AI company sued Minnesota Attorney General Keith Ellison, arguing that the statute restricts speech and visual-expression software.
The state designed the same rule to target websites and apps that generate sexualised images without consent.
Minnesota Law Carries A $500,000 Penalty
Minnesota’s law, passed in April, targets apps and websites that allow non-consensual sexualised imagery and attaches a $500,000 fine to each prohibited explicit-deepfake creation.
CNBC traced the bill to state Sen. Erin Maye Quade and reported that she learned of a man who used social media photos to create sexualised images and videos of more than 80 women he knew.
In September, Maye Quade compared the proposal with older laws that bar peeping into windows to capture explicit photos.
xAI Frames The Rule As A Speech Dispute
The federal complaint characterises the statute as overbroad and content-based, framing it as a restriction on free speech and visual-expression software.
The federal complaint uses a hypothetical business whose users created 100,000 prohibited images and faced $50 billion in fines.
The filing also gives the company’s compliance defence.
The company maintains that it strictly bars users from producing nude or sexualised images of people without consent and that it has sued users accused of evading its technological blockers to create those images.
Grok Litigation Adds Platform-Risk Context
The lawsuit arrives while SpaceXAI, the name now used for the combined artificial-intelligence business, faces a proposed class action tied to Grok.
Plaintiffs allege that Grok helped produce and circulate child sexual abuse material based on real photos or videos of them, and that xAI failed to share information with authorities about alleged perpetrators who used Grok to nudify their images.
The Minnesota challenge follows a similar xAI case against a California law covering AI-generated deepfake content.
That earlier effort was partly successful after a federal judge struck down a restriction on AI-generated deepfakes during elections.
The federal case was filed before the Minnesota law’s Saturday start date.
