US appeals court blocks Minnesota law banning AI fake nudes in xAI lawsuit

A US appeals court has blocked Minnesota's pioneering ban on AI-generated fake nude images, handing a temporary victory to Elon Musk's xAI as it challenges the law on constitutional grounds.

The St Louis-based 8th US Circuit Court of Appeals issued an order on 2 October putting the law on hold. The decision grants a request for an emergency injunction by xAI, reversing a lower court judge who had rejected the company's bid to stop the law just last month.

At the heart of the dispute is Minnesota's first-in-the-nation "anti-nudification" law, which took effect on 1 August. The statute bans website operators, software developers, and other technology providers from allowing users to create realistic, altered images that depict intimate body parts of an identifiable person when those parts were not showing in the original photograph.

Why xAI is fighting the ban

xAI, which integrates its Grok assistant into the social media platform X, argues that the law is an unconstitutional dragnet that restricts free speech.

The company has defended its own systems, stating that its Grok Imagine tool already includes "rigorous protections" designed to prevent users from generating sexualised or nudified images of real people. To back this up, xAI has pointed out that it has begun suing users who actively try to evade Grok's technological safeguards to create non-consensual sexual images.

Minnesota officials, however, have urged courts to keep the law in place. The state argues the measure is a critical tool to combat the spread of what it described as a "staggering amount" of child sexual abuse material generated by AI products, specifically naming Grok Imagine in its filings.

The legal path forward

The appeals court's decision is a swift reversal of a ruling by US District Judge Donovan Frank. Last month, Judge Frank declined to block the law, ruling that xAI had failed to show it would suffer irreparable harm while the wider lawsuit made its way through the courts. He also suggested the company had waited too long to seek emergency relief after the law was passed.

In its appeal, xAI strongly contested the judge's findings, arguing it had not delayed its challenge. The 8th Circuit ultimately sided with the tech company, freezing the state's enforcement of the ban for now.

The injunction will remain in place while the court hears the full arguments on whether the law violates the US Constitution's First Amendment.