Judge Refuses to Block Minnesota's Ban on AI 'Nudify' Apps, Handing xAI a Setback

A federal judge in Minneapolis has refused to block Minnesota's first-in-the-nation ban on AI "nudify" apps, clearing the way for the law to take effect on August 1, 2026, despite an eleventh-hour legal challenge from Elon Musk's xAI.

U.S. District Judge Donovan Frank denied xAI's request for a temporary restraining order in a ruling issued Friday, July 31. Frank's decision turned heavily on timing: he noted that xAI filed its motion "on July 29, 2026, nearly three months after the law was signed, and only three days before the law is set to take effect."

"Such a delay in bringing the action and the motion suggests that harm is not immediate," Frank wrote in the order, issued by the U.S. District Court for the District of Minnesota.

The ruling does not end xAI's underlying lawsuit against the state. It only means Minnesota's ban can be enforced while the litigation continues. Frank converted xAI's request into a motion for a preliminary injunction, ordering Minnesota Attorney General Keith Ellison to file his opposition brief by August 12, with xAI's reply due August 17. Frank scheduled a hearing on the injunction for August 19.

Minnesota's law, House File 1606, was signed by Gov. Tim Walz in May and passed the legislature with near unanimity -- 65-0 in the Senate and 132-1 in the House. It bans technology that produces "nudified" images, defined in the statute as content in which "an image or video is altered or generated to depict an intimate part not depicted in an original unaltered image or video of an identifiable individual" without the subject's consent. The law creates civil penalties and a legal pathway for both victims and the attorney general's office to sue companies that build or distribute nudification tools.

xAI sued Ellison on July 28, arguing the law violates the First Amendment. "HF 1606 flouts these foundational First Amendment principles," the company's complaint stated. "It is content-based and vastly overinclusive: it bans protected non-sexual, consensual, and non-disseminated speech that has no connection to any legitimate interest in preventing distribution of nonconsensual nude images." xAI's lawyers also argued the law is "overinclusive" and asserted that "there are far less restrictive alternatives that function to achieve the same ends." The filing warned that the penalty structure could expose the company to fines running into the tens of billions of dollars, citing roughly 100,000 prohibited images allegedly created by users of its systems and calling the potential liability "an eye-popping 50 billion dollars."

Ellison welcomed the ruling. "I'm proud to be in court defending the dignity of Minnesotans," he said following Friday's decision. State Sen. Erin Maye Quade, the Minneapolis Democrat who authored HF 1606, said she began drafting the bill roughly two years ago after Minnesota women told her that a man had taken photos from their social media accounts and turned them into "hyperrealistic sexual images and videos." She was pointed about her view of xAI's motives when the company first sued. "When the richest man in the world is suing you because you want to protect kids, you have to wonder -- why doesn't he want them protected?" she said.

Friday's ruling lands amid broader scrutiny of xAI's handling of non-consensual sexualized imagery generated through its Grok chatbot. Earlier this year, users of Musk's social platform X flooded the service with sexualized deepfakes produced using Grok, prompting a cease-and-desist order from California's attorney general and a government ban on Grok in Indonesia. Minnesota lawmakers and advocates have pointed to that episode, along with concerns about AI-generated child sexual abuse material, as part of the rationale for HF 1606.

Why It Matters

Minnesota's statute is the first state law in the country to directly target "nudify" technology, and it sets up a consequential test of how far states can go in regulating AI image-generation tools without running afoul of the First Amendment. xAI's core argument -- that the ban is content-based, overbroad, and financially punitive to an unconstitutional degree -- is likely to be echoed by other AI companies as more states consider similar bills targeting deepfake and non-consensual imagery tools. The case also arrives as regulators nationally and internationally grapple with the same underlying problem exposed by Grok's own missteps: chatbots and image generators capable of producing sexualized deepfakes at scale, often faster than platforms can moderate them. How Judge Frank ultimately rules on the preliminary injunction will help determine whether narrowly targeted nudification bans can survive judicial scrutiny, or whether legislatures will need to rewrite such laws to withstand free-speech challenges.

What to Watch

Minnesota Attorney General Keith Ellison's opposition brief is due August 12, followed by xAI's final brief on August 17, ahead of the preliminary injunction hearing before Judge Frank on August 19. That hearing will determine whether Minnesota's ban remains in force for the duration of the litigation or is paused while the case is decided. Watch, too, for how other states respond: several legislatures have discussed similar nudification bans, and Minnesota's law -- now the first to be tested in federal court -- is likely to serve as the model, or cautionary tale, for how they draft their own. Also worth tracking is whether xAI's broader legal and regulatory troubles over Grok-generated sexual imagery, including the California cease-and-desist order and international bans, factor into how aggressively other jurisdictions move against the company.