Elon Musk's xAI has lost another court bid to block Minnesota's first-in-the-nation ban on AI 'nudification' apps. A federal judge on Friday denied the company's request for a preliminary injunction, allowing the law to stay in force while the case proceeds — and letting state regulators impose fines of up to $500,000 per violation in the meantime. xAI says it will appeal to the St. Louis-based 8th US Circuit Court of Appeals.
The judge ruled that xAI failed to show the irreparable harm required for an injunction, and that the public interest strongly favors the state, according to Reuters and local reports. It is the company's second defeat in the case: an earlier attempt to halt the law before it took effect on August 1 also failed.
Minnesota's statute, which took effect last month, is the first law of its kind in the United States. It bars operating websites, apps or software that provide access to 'nudification' technology — AI tools that superimpose real people into sexualized deepfakes. Supporters call it a shield against non-consensual image-based abuse; critics, including xAI, argue it is overbroad and chills legitimate AI development and speech.
The clash is a marker in a wider trend: with federal AI legislation stalled, US states are increasingly writing their own rules for generative AI — from deepfake statutes to data-center regulations. A flagship AI company owned by Musk fighting a state law turns Minnesota into a test case for how far states can go before running into constitutional and federal limits. An appeal at the 8th Circuit could give a higher court its first say on that boundary.
