U.S. District Judge Donovan Frank ruled Friday that xAI had not demonstrated that it would suffer sufficient harm to justify an early injunction against the law. The company has argued that the legislation violates the First Amendment by restricting protected expressive activity.
The Minnesota law, which took effect August 1, is the first of its kind in the United States. It prohibits website operators, software developers and others from allowing users to employ AI technology to “nudify” images of identifiable individuals.
The dispute places emerging generative-AI technology at the center of a broader constitutional debate over where free-speech protections end and government regulation of digitally fabricated sexual imagery begins.
Frank acknowledged the difficulty of the legal questions surrounding the case, particularly because courts are being asked to apply constitutional principles to technology that has developed rapidly in recent years.
“The constitutional issues raised by the parties are complex, particularly when considered in the context of this new technology and the risks that it poses to the public,” Frank wrote. “These issues deserve, and will receive, full consideration.”
The judge's decision does not resolve xAI’s underlying constitutional challenge. Instead, it allows Minnesota’s law to remain effective while the broader lawsuit proceeds.
xAI argued that the law places unconstitutional restrictions on speech and expressive activity. The company said in a court filing Friday that it intends to appeal Frank’s decision to the St. Louis-based 8th U.S. Circuit Court of Appeals.
Neither xAI nor its lawyers immediately responded to requests for comment.
Minnesota officials, meanwhile, defended the law as a targeted response to the growing misuse of artificial intelligence to produce nonconsensual sexual imagery.
Minnesota Attorney General Keith Ellison, a Democrat, described the legislation as “overwhelmingly bipartisan and nearly unanimously approved” by state lawmakers.
“These nudification apps have been used to generate child sexual abuse materials and harass people in the vilest ways imaginable,” Ellison said in a statement Friday. “That repulsive behavior is not welcome in Minnesota.”
The ruling is the latest development in a legal fight that began before the law took effect. Frank previously rejected Musk’s request in July to prevent the legislation from taking effect, although he agreed to accelerate his review of the constitutional challenge.
The case comes amid growing scrutiny of Musk’s Grok AI chatbot, which has faced criticism over its ability to generate sexually explicit material. The controversy has intensified concerns among regulators and policymakers about the safeguards surrounding generative-AI systems and their potential to produce illegal or abusive content.
Authorities and lawmakers in various jurisdictions have increasingly sought stronger protections against artificially generated sexual material, particularly when it involves children or depicts people without their consent.
xAI has also taken steps of its own against misuse of its technology. The company has begun suing users it alleges circumvented Grok’s technological safeguards in order to generate sexualized images of people without their consent.
For Minnesota, Friday’s ruling means the state’s pioneering restrictions will remain in effect for now. For xAI, the decision marks another setback in its effort to stop the law while it challenges its constitutionality.
The case could ultimately provide an important test of how courts apply First Amendment protections to AI-generated content and how far states can go in regulating technology used to create realistic but fabricated sexual images.