Elon Musk's xAI sues Minnesota over law to ban 'nudify' apps

xAI, now owned by SpaceX, is suing Minnesota to block a law that would ban “nudify” apps and punish platforms that enable non-consensual sexualized imagery. The company argues the statute is an overbroad, content-based restriction on free speech and visual expression. The law, set to take effect Saturday, includes fines of $500,000 per instance of explicit deepfake creation and was passed in April to curb AI-generated sexual abuse imagery. The case highlights mounting legal and regulatory pressure on AI content tools, especially image generation and chatbot products like Grok, which are also facing separate allegations tied to child sexual abuse material and “nudification.” The dispute could set a precedent for how states regulate AI-generated explicit content and may affect investor sentiment around SpaceX-linked AI operations and broader AI governance risks.