Court Denies xAI's Bid to Block the First US Ban on AI "Nudify" Services

US District Judge Donovan Frank denied xAI's emergency request to block the first law in the country banning AI "nudify" services — tools that generate fake nude images of real people without their consent. The law, signed by Minnesota Governor Tim Walz back in May 2026, took effect on August 1 and will now stay in force while xAI's underlying lawsuit against it continues through the courts.

• xAI only filed its motion for a temporary restraining order on July 29 — nearly three months after the law was signed, and just three days before it took effect
• The judge pointed to that delay directly in the ruling as evidence the harm isn't immediate
• The law carries civil fines of up to $500,000 per violation, compensation for emotional distress, punitive damages, and legal cost reimbursement — no criminal liability
• xAI is challenging the law on First Amendment grounds, calling it both "overinclusive" and "underinclusive" while arguing far less restrictive alternatives exist

Such a delay in bringing the action and the motion suggests that harm is not immediate.

The lawsuit follows a scandal around xAI's Grok chatbot: after its December 2025 launch, users mass-produced nonconsensual explicit images of real people with it, prompting Apple to threaten pulling the app from the App Store in January 2026 unless xAI tightened its restrictions. For more on how Grok and xAI got here, we have a separate deep dive into the full story of Elon Musk's AI. The European Commission has separately opened an investigation into X over possible Digital Services Act violations, and xAI is already facing class-action lawsuits, including one from a British member of parliament. A similar risk around AI-generated fake imagery of real places surfaced just days ago at another major player: Google had to pull its own AI satellite-image generator from Google Earth a day after launch. More detail on the Minnesota ruling is available via TechCrunch.

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