Elon Musk's xAI has suffered another legal setback in its fight against Minnesota's new law targeting AI-generated sexual images, leaving Grok subject to the state's restrictions while the company's wider constitutional challenge continues.
US District Judge Donovan Frank rejected xAI's request for a preliminary injunction on 4 September, following an earlier decision that refused to temporarily stop the law from taking effect.
The ruling does not settle whether Minnesota's law violates the First Amendment, but it means xAI has so far failed to persuade the court that the legislation should be suspended during the case. Minnesota is not alone in scrutinising Grok.
California, New York and a bipartisan group of other state attorneys general have also demanded further action from xAI. Those cases have not produced equivalent court victories, but they show how quickly state authorities are testing their powers over AI-generated content.
Minnesota Grok Law Survives Two xAI Court Challenges
Minnesota's law took effect on 1 August after lawmakers approved it with overwhelming support. It prevents websites, applications, software and other services from allowing users to 'nudify' images or videos, with the restrictions applying to platforms rather than solely to the individuals generating the material.
The law also allows civil penalties of up to $500,000 (£370,000) for each unlawful access, download or use, which xAI has argued could create severe exposure for an AI company operating at scale.
xAI sued Minnesota in July, arguing that the legislation goes beyond stopping non-consensual sexual imagery and could cover material protected by the First Amendment. The company pointed to examples including images of people in swimwear, shirtless men and satirical creations.
Its argument is that the law's definition of intimate areas is sufficiently wide that lawful generations could potentially fall within its reach.
Judge Frank first refused xAI's request for a temporary restraining order in July. The judge noted that the company had waited until shortly before the law was due to take effect before seeking emergency relief. That decision allowed Minnesota to begin enforcing the legislation on schedule.
The latest ruling keeps the law in force while the case continues, although it still does not decide the central constitutional question. Frank found that xAI had not demonstrated the irreparable harm required for a preliminary injunction and concluded that the balance of harms favoured Minnesota.
He also described the constitutional questions surrounding the technology and the law as complex, indicating that the underlying case remains alive. The company can continue pursuing the case and has indicated that it plans to appeal the latest decision.
California and New York Are Turning Up the Pressure
California has taken a different route. Attorney General Rob Bonta opened an investigation in January into the production of non-consensual sexually explicit material through Grok and later sent xAI a cease-and-desist letter demanding action against such content.
Those measures represent state enforcement pressure, but they are not court judgements establishing that California has defeated xAI legally.
New York Attorney General Letitia James also joined forces with 34 other attorneys general in January to demand that xAI explain how it would prevent Grok from producing and distributing non-consensual intimate imagery.
The coalition called for stronger safeguards, removal of harmful material and action against users responsible for creating it. Again, this was an intervention by state authorities rather than a judicial ruling against xAI.
At the same time, xAI has sought to demonstrate that it is taking action against misuse of Grok. In its Minnesota litigation, the company said its policies prohibit nudifying real people, sexualising children and using its services for illegal or abusive activity.
It also said it uses account suspensions, terminations and reports to authorities when it identifies suspected child sexual abuse material. For xAI, the latest decision is therefore a setback, not the end of the fight.
