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Court Says Minnesota Can Now Fine AI Companies That Offer “Nudification” Services


— September 4, 2026

“That repulsive behavior is not welcome in Minnesota,” Minnesota Attorney General Keith Ellison said. “My office and I will continue to vigorously defend the law and the Minnesotans it was designed to protect from xAI’s lawsuit.”


Minnesota officials are free to fine technology companies that permit the creation of AI-generated nude images of real people in violation of a recently-enacted state law.

On Friday, U.S. District Judge Donovan W. Frank on Friday issued a ruling against SpaceXAI, formerly known as xAI. The company, founded by Elon Musk and best known for its Grok chatbot, sued Minnesota in July, claiming that the “nudification” law infringes on free speech.

SpaceXAI’s lawsuit remains pending, but Frank’s ruling allows Minnesota officials to begin imposing fines of up to $500,000 per violation in the meantime.

“The state has enacted, democratically and nearly unanimously, a civil statute aimed at protecting the public from the undisputed harm stemming from AI-nudification technology and the resulting proliferation of photorealistic sexualized images,” Frank wrote.

In his ruling, the judge acknowledge that the constitutional issues raised by SpaceXAI “are complex, particularly when considered in the context of this new technology and the risks that it poses to the public.”

Minnesota Public Radio News notes that, in his decision, Frank observed that victims of “nudification” tools often suffer intense financial and psychological harm. He also said that the company likely waited too long to submit its complaint, which was filed just ahead of the law’s August 1 effective date.

In a statement, Minnesota Attorney General Keith Ellison said that the ease of generating realistic nude images creates a great potential for harm, particularly when it comes to children and AI-generated child abuse materials.

Lady Justice with her scales; image by dp singh Bullar, via Pexels.com.
Lady Justice with her scales; image by dp singh Bullar, via Pexels.com.

“That repulsive behavior is not welcome in Minnesota,” Ellison said. “My office and I will continue to vigorously defend the law and the Minnesotans it was designed to protect from xAI’s lawsuit.”

Ellison said that his office will continue defending the law until SpaceXAI’s claim is resolved.

“I am extremely proud to be defending this law, and along with it, the dignity of the people of Minnesota,” he said. “Minnesota’s landmark, overwhelmingly bipartisan and nearly unanimously approved law banning AI technology products, like X.AI’s Grok Imagine, from generating nudified and other sexual images continues to be in effect.”

Under the state’s new law, companies that enable the creation of non-consensual sexualized images and videos through the use of artificial technology could be subject to civil penalties of up to $500,000, while persons who have been victimized are entitled to seek damages.

SpaceXAI indicated that it will continue to litigate its claim.

In its original lawsuit, filed in July of this year, attorneys for the company described the law—HF 1606—as unconstitutional.

“Although Minnesota likely has a compelling interest in preventing individuals from creating nudes of other people without consent and distributing that content, the statute punishes AI platforms for assisting in the creation of a substantial amount of protected speech in relation to that limited goal,” the company said.

In earlier court filings, SpaceXAI submitted exhibits that included satirical pictures of President Donald Trump in “scant clothing,” as well as AI-generated images of Musk himself, saying that a broad ban on “sexualized” content could limit much more than nude and overtly sexual images.

MPR notes that Minnesota has formally moved to dismiss the lawsuit; its motion remains pending.

Sources

Elon Musk’s company sues Minnesota over new law to bar manipulated images to fake nudity

Judge lets Minnesota enforce anti-nudification app law over xAI objection as case proceeds

Minnesota’s AI nudification ban can go into effect during Musk lawsuit, federal judge rules

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