xAI Sues Minnesota Attorney General Over First-in-Nation AI "Nudification" Law

X.AI LLC, Elon Musk's AI company, filed a federal First Amendment complaint on July 27, 2026, against Minnesota Attorney General Keith Ellison in the U.S. District Court for the District of Minnesota, challenging House File 1606's ban on AI "nudification" technology as an overbroad, content-based speech restriction.

Information last verified on September 5, 2026. This is a developing story; we update it as the record changes.

Status: X.AI LLC v. Ellison, No. 0:26-cv-03425 (D. Minn.), was filed July 27, 2026. A federal judge denied xAI's request for a temporary restraining order on July 31, 2026, and Minnesota's nudification law took effect August 1, 2026. After a hearing on August 19, 2026, Judge Donovan W. Frank denied the preliminary injunction on September 4, 2026 (Doc. No. 54), holding that xAI had not shown irreparable harm and that the balance of harms and the public interest favor the State. The court did not reach the merits, so no ruling on the law's constitutionality has been issued as of September 5, 2026. xAI filed a notice of appeal to the U.S. Court of Appeals for the Eighth Circuit the same day. See our coverage of the September 4 order denying the injunction.

Jurisdiction scope: This article covers a Minnesota state law, Minn. Stat. Section 325E.91, and a federal lawsuit filed in the U.S. District Court for the District of Minnesota. The law applies only within Minnesota. The federal court's eventual ruling, when issued, would bind enforcement of this specific Minnesota statute; it would not automatically change nudification, deepfake, or non-consensual intimate image laws in any other state. See our national deepfake and AI voice cloning tracker for how other states approach this issue.

What Happened

On July 27, 2026, X.AI LLC filed a civil complaint against Minnesota Attorney General Keith Ellison in the U.S. District Court for the District of Minnesota, docketed as No. 0:26-cv-03425. The company, which operates the Grok Imagine image-generation tool, asked the court to declare Minnesota's new nudification statute unconstitutional and to enjoin Ellison from enforcing it. xAI's attorneys wrote that the law "imposes an overbroad, content-based ban on free speech and the tools of visual expression in a clumsy attempt to prohibit 'nudification.'"

The complaint argues the statute reaches far beyond non-consensual intimate deepfakes. According to xAI's filing, the law contains no scienter requirement, meaning a platform can face liability regardless of whether it knew, or should have known, a user misused it, and no safe harbor for services that prohibit nudification in their terms of use and maintain technical controls against it. The company separately contends the per-violation penalty structure could expose a platform to enormous aggregate liability from widespread user misuse, even where its policies try to prevent that misuse.

Two days after filing, on July 29, 2026, xAI moved for a temporary restraining order to block the law before its August 1 effective date. U.S. District Judge Donovan W. Frank denied that motion on July 31, 2026, reasoning that xAI's delay in seeking emergency relief, filed nearly three months after the bill was signed and only days before it took effect, undermined the claim that immediate intervention was necessary. Frank did not rule on the merits of xAI's First Amendment arguments. He instead directed that xAI's request be treated as a motion for a preliminary injunction, with a reply due August 17, 2026, and a hearing scheduled for August 19, 2026. The law took effect as scheduled on August 1, 2026.

These are allegations and legal arguments made in a filed complaint and injunction motion. None of xAI's claims about the statute's scope or effect have been adjudicated, and the preliminary-injunction request remains pending.

What the Law Actually Says

House File 1606 created Minn. Stat. Section 325E.91, titled "Prohibition on Nudification Technology," inside the commerce-related chapter 325E of Minnesota Statutes. The law provides that a person who owns or controls a website, application, software, program, or other service may not allow a user to access, download, or use that service to nudify an image or video, and may not nudify an image or video on a user's behalf. It also bars advertising or promoting a service for that purpose. An image or video is "nudified" when it is altered, or generated, to depict an intimate part of an identifiable individual not shown in the original, or altered so realistically that a reasonable person would believe it shows that person's intimate part. The statute exempts services where nudifying an image requires genuine technical skill from the user, targeting turnkey tools rather than general-purpose editing software.

Enforcement runs through two tracks. The attorney general may enforce the statute under Minn. Stat. Section 8.31, and a violator faces a civil penalty of up to 500,000 dollars for each unlawful access, download, or use; collected penalties fund grants for sexual assault and related-crime victims through the Minnesota Office of Justice Programs. Separately, an individual depicted in a nudified image or video may bring a private civil action for compensatory damages, including mental anguish, up to three times actual damages. The statute took effect August 1, 2026, and applies to conduct occurring on or after that date.

Minnesota already has a longstanding statute covering distribution of real and doctored private sexual images. Section 325E.91 is narrower in target but broader in reach in a different way: it does not require that a nudified image ever be shared or published, since liability attaches at the point a platform allows one to be created, which is the core of xAI's overbreadth argument. This case sits alongside our page on Minnesota's deepfake laws and Minnesota's broader AI regulation, and follows a wave of state legislation aimed at AI-generated sexual imagery, tracked on our US AI laws hub. It also follows other recent litigation over xAI's Grok tools, covered in our report on teenagers suing xAI over Grok deepfake images.

Analysis: Why This Matters

The following is analysis from the Recording Law Editorial Team. This lawsuit tests a drafting choice that a growing number of states are likely to confront: whether a law aimed at non-consensual sexualized deepfakes should regulate the tool that can produce them, or only the finished image once it is created and shared. Minnesota chose the former. That approach can close a gap that image-based-abuse statutes historically left open, since a victim's harm does not require distribution once a nudified image exists. It also raises a harder First Amendment question, because it reaches conduct, and potentially speech, that occurs before any dissemination and regardless of the user's intent or the platform's efforts to prevent misuse.

The absence of a scienter requirement is the crux of xAI's overbreadth theory. Courts applying First Amendment overbreadth doctrine generally ask whether a statute's plainly legitimate sweep, here, stopping platforms from being used to create non-consensual sexualized images of real people, is outweighed by a substantial number of impermissible applications relative to that legitimate sweep. Whether Minnesota's law reaches only tools purpose-built for nudification, or also sweeps in general image-editing or generative-AI platforms that can be misused despite good-faith safeguards, is precisely the factual and legal dispute the coming injunction briefing will address. This case does not turn only on the First Amendment; it also implicates how far a state can regulate software providers, rather than the individual users who misuse their tools, a question other states drafting similar bills are watching closely.

This analysis does not predict how the court will rule on the preliminary-injunction motion or on the underlying constitutional claims, and it is not legal advice.

What Happens Next

Update, September 5, 2026. The preliminary-injunction hearing was held on August 19, 2026, and Judge Frank denied the motion on September 4, 2026. The order rests on the second, third and fourth preliminary-injunction factors: xAI delayed nearly three months after the bill was signed before seeking emergency relief, did not otherwise show irreparable harm, and the balance of harms and the public interest tip toward the State. The court never reached likelihood of success, so xAI's core First Amendment and overbreadth arguments remain undecided. Minn. Stat. Section 325E.91 remains in effect and enforceable by the Minnesota attorney general. Our separate article on the September 4 order sets out the reasoning in full.

xAI filed a notice of appeal to the U.S. Court of Appeals for the Eighth Circuit on September 4, 2026, the same day the order issued, and the district court transmitted the interlocutory appeal notice that day. Minnesota's motion to dismiss, filed August 19, 2026, is still pending; a September 1, 2026 order stayed its briefing until 21 days after the mandate issues in any appeal from the preliminary-injunction decision. The constitutional questions therefore sit in that stayed motion rather than in the pending appeal, which concerns preliminary relief only. We will update this article as each of those events occurs.

This is general legal information, not legal advice. It covers a Minnesota state statute and a federal lawsuit pending in the U.S. District Court for the District of Minnesota, and reflects sources verified on September 5, 2026. This is a developing story and details may change; consult a lawyer licensed in Minnesota or your jurisdiction about your specific situation.

Related articles

• Minnesota Deepfake Laws
• US Deepfake Laws Tracker
• Minnesota AI Laws
• US AI Laws Hub
• Teens Sue xAI Over Grok Deepfake Images
• The September 4, 2026 order denying xAI a preliminary injunction

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Last updated: 2026-09-05. This is a developing story; details verified as of 2026-09-05.

More Minnesota Laws

• Minnesota AI Meeting Recording Laws
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Frequently Asked Questions

Has a court ruled on xAI's lawsuit against Minnesota's nudification law?

Not on the merits. A federal judge denied xAI's request for a temporary restraining order on July 31, 2026, on timing grounds, and Minnesota's law took effect August 1, 2026. After an August 19, 2026 hearing, the court denied the preliminary injunction on September 4, 2026, but it decided the motion on irreparable harm and the balance of harms and expressly did not reach the First Amendment question. xAI appealed to the Eighth Circuit the same day.

What is the case name and docket number?

X.AI LLC v. Ellison, No. 0:26-cv-03425, filed in the U.S. District Court for the District of Minnesota on July 27, 2026.

What does Minnesota's nudification law actually prohibit?

Minn. Stat. Section 325E.91, created by House File 1606, bars anyone who owns or controls a website, app, software, or program from letting a user access, download, or use it to nudify an image or video of an identifiable person, and bars advertising such a service. It exempts tools that require genuine technical skill to misuse.

What penalties does the law impose?

Violators face a civil penalty of up to 500,000 dollars for each unlawful access, download, or use, enforceable by the Minnesota attorney general. Individuals depicted in a nudified image can separately sue for compensatory damages up to three times actual damages.

What is xAI's main legal argument?

xAI argues the law is an overbroad, content-based restriction on speech that lacks a scienter requirement and lacks a safe harbor for platforms whose policies and technical controls prohibit nudification, and that it sweeps in conduct beyond non-consensual intimate deepfakes.

Is Minnesota's law the first of its kind?

It is described as the first state law to target nudification technology and platforms directly, rather than only regulating the distribution of finished non-consensual intimate images, which most existing state deepfake and image-abuse laws address.

Does this lawsuit affect deepfake laws in other states?

Not directly. The case concerns only Minnesota's statute and a Minnesota federal court's eventual ruling. It may still influence how other states draft nudification-specific bills, since it tests scienter and safe-harbor provisions that are common drafting questions nationally.

When will the case be resolved?

No timeline is set for a final resolution. The preliminary injunction was denied on September 4, 2026 and xAI appealed to the Eighth Circuit that day. Minnesota's motion to dismiss remains pending in the district court, and a September 1, 2026 order stayed its briefing until after any appeal of the preliminary-injunction decision concludes.