Federal appeals court lets xAI keep fighting Minnesota's AI nudify ban

The 8th U.S. Circuit Court of Appeals granted xAI an injunction pending appeal on October 2, blocking Minnesota from enforcing its AI nudification law, HF1606 (Chapter 72), against the company while its First Amendment suit X.AI LLC v. Ellison, No. 26-2806, proceeds. The ruling reversed a September 4 decision by U.S. District Judge Donovan W. Frank, who found xAI waited too long to sue and failed to show irreparable harm; Minnesota's law, which took effect August 1 and carries civil penalties up to $500,000 per unlawful access, download, or use plus triple damages for victims, was the first state law of its kind and passed 132-1 in the House and 65-0 in the Senate. xAI sued Attorney General Keith Ellison in late July, arguing the statute lacks a safe harbor for platforms like Grok's Imagine tool that block nonconsensual nude imagery, and Ellison has said he will keep defending the law.

A Minnesota judge said xAI moved too slowly to challenge the state's AI "nudification" ban. An appeals court disagreed and paused the law anyway. On September 4, a Minnesota federal judge refused to pause the state's nudification law, ruling xAI had waited too long to sue and couldn't show irreparable harm. The 8th U.S. Circuit Court of Appeals saw it differently: on October 2, it granted xAI an injunction pending appeal, blocking Minnesota from enforcing the law against the company while its First Amendment lawsuit continues. The order itself was one sentence long. Minnesota's law, passed as HF1606 and codified as Chapter 72, took effect August 1. It bars anyone who owns or controls a website, app, or program from letting users generate a realistic fake image showing an intimate body part of a real, identifiable person that wasn't visible in the original photo. Violators face a civil penalty of up to $500,000 for every unlawful access, download, or use. On top of that, the law gives victims a separate right to sue for triple damages, punitive damages, and attorney's fees. xAI sued Attorney General Keith Ellison in late July, before the law even took effect, arguing it criminalizes protected speech and sweeps in far more than revenge porn. The company's core complaint is the absence of a safe harbor: the statute imposes its $500,000-per-image penalty even on platforms that actively try to block nudification. And that, xAI says, is exactly what Grok's Imagine tool does. xAI has told courts it bans users from generating nonconsensual nude or sexualized images and has sued users who evade those blockers. It also argued the law's definition of "intimate part" is broad enough to cover body parts regularly shown in public, like a midriff in a swimsuit photo. Ellison isn't backing down. When xAI first filed suit, he posted on X that "there are plenty of worthy debates to be had" about AI, "but this isn't one of them," calling AI nudification an attack on a victim's dignity. After the district court's September ruling, a spokesperson for his office said he would keep defending the law. That stance hasn't changed now that the 8th Circuit has stepped in. Elon Musk's xAI loses again in fight against Minnesota's nudification ban https://startupfortune.com/elon-musks-xai-loses-again-in-fight-against-minnesotas-nudification-ban/ US District Judge Donovan W. Frank denied xAI's bid to block Minnesota's AI nudification ban on September 4, marking the company's second straight courtroom loss even with the Justice Department backing its First Amendment challenge. The law, which carries penalties up to $500,000 per violation, stays in force as the case proceeds toward a ruling... - how to fight AI nudification bans legally https://startupfortune.com/elon-musks-xai-loses-again-in-fight-against-minnesotas-nudification-ban/ - elon musk xAI Minnesota nude image law https://startupfortune.com/elon-musks-xai-loses-again-in-fight-against-minnesotas-nudification-ban/ xAI filed its notice of appeal on September 9, and the case is now docketed at the 8th Circuit as X.AI LLC v. Ellison, No. 26-2806. An injunction pending appeal is a narrow tool: it doesn't decide whether the law is constitutional, it just freezes enforcement against xAI specifically while the merits get fully briefed. The three-judge panel didn't publish reasoning alongside the one-line order. So the strength of xAI's First Amendment theory, and whether the $500,000 penalty structure without a safe harbor will survive scrutiny, still has to play out in full briefing. What's already clear is the stakes beyond Minnesota. HF1606 was the first state law of its kind in the country. It passed 132-1 in the Minnesota House and 65-0 in the Senate, after a man used social media photos to create sexualized images of more than 80 women he knew, according to reporting from the Minnesota Reformer. Other states drafting similar bills are watching this case closely: if the 8th Circuit eventually rules the statute's lack of a safe harbor makes it too broad, that's the template lawmakers elsewhere will need to avoid. For now, Grok's image tools keep running in Minnesota without the threat of a $500,000 penalty hanging over every flagged output, at least until the full appeal is decided. Ellison's office has given no indication it plans to let that stand without a fight. Also read: Mistral unveils 1 trillion parameter Le Chonk model to rival Chinese AI https://startupfortune.com/mistral-unveils-1-trillion-parameter-le-chonk-model-to-rival-chinese-ai/ • Micron agrees to pay Netlist $600 million to end patent war https://startupfortune.com/micron-agrees-to-pay-netlist-600-million-to-end-patent-war/ • Nano Banana 2.1 Surfaced In Google Flow Then Vanished With No Announcement https://startupfortune.com/nano-banana-21-surfaced-in-google-flow-then-vanished-with-no-announcement/ This article is posted in Technology News https://startupfortune.com/category/technology/ , check it out for more related stories. Canada widens its AI deepfake bill to cover nearly nude images https://startupfortune.com/canada-widens-its-ai-deepfake-bill-to-cover-nearly-nude-images/ Canadian MPs have amended Bill C-16 to cover nearly nude AI deepfakes, widening the legal risk around nonconsensual synthetic imagery. The change matters for AI apps, social platforms and creator tools that handle realistic edits of identifiable people. - how to create deepfake images with AI technology https://startupfortune.com/canada-widens-its-ai-deepfake-bill-to-cover-nearly-nude-images/ - Canada AI deepfake law nearly nude images regulation https://startupfortune.com/canada-widens-its-ai-deepfake-bill-to-cover-nearly-nude-images/ Join the discussion Open in the community → https://startupfortune.com/community/ Almost there. Sign in and your reply posts straight away.