Elon Musk’s xAI Says Minnesota’s ‘Clumsy’ Nudify-App Ban Violates the First Amendment and Could Trigger Billions of Dollars in Fines

Shomik Sen Bhattacharjee

Thu, July 30, 2026 at 1:00 PM GMT+3 5 min read

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Elon Musk's xAI sued Minnesota Attorney General Keith Ellison on Monday, asking a federal court to block a new law restricting "nudification" tools before it takes effect Aug. 1.

xAI Challenges Law On Free Speech

The complaint says House File 1606 "imposes an overbroad, content-based ban on free speech and the tools of visual expression in a clumsy attempt to prohibit 'nudification.'" xAI argues that creating images and videos counts as protected expression and that Minnesota cannot impose strict liability based solely on user output.

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The statute bars operators of websites, apps and software from letting users alter images so identifiable people appear to expose intimate body parts. Minnesota may seek penalties of up to $500,000 for each instance of unlawful access, download, or use. Victims may also seek treble damages, punitive damages, and legal fees.

xAI said those fines could compound rapidly. Ten prohibited images could create $5 million in exposure, while 100,000 could trigger an "eye-popping $50 billion dollars," according to the complaint. The company said the law lacks a knowledge or intent requirement and provides no safe harbor for platforms that use safeguards.

Musk's Company Defends Its Content Safeguards

Musk's company said it "strictly prohibits" users from generating nude or sexualized images of real people without consent and has sued users who bypass its technological blockers. Musk previously warned that anyone using Grok to create illegal content would face the same consequences as someone uploading it directly.

Benzinga reached out to the Minnesota Attorney General's office but did not receive an immediate response.

The challenge comes as xAI faces a proposed class action from three Tennessee teenagers who allege Grok-powered tools transformed real photographs of them into sexually explicit images when they were minors. xAI has said it maintains "zero tolerance" for child sexual exploitation, nonconsensual nudity and unwanted sexual content.

Minnesota Defends Protections Against Deepfake Abuse

Minnesota lawmakers designed the measure to stop such images from spreading. Sen. Erin Maye Quade (D-Minn.) who led the proposal, told the Associated Press in March that companies "cannot keep unleashing this technology into the world with no consequences," calling it "harmful by its very nature." Legal scholars interviewed by AP also warned that the bill's breadth could create First Amendment problems.

Image via Shutterstock

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