Judge Denies xAI's Request to Block Minnesota's Nudify Ban

US District Judge Donovan Frank on July 31, 2026 denied a temporary restraining order (TRO) sought by SpaceX-owned xAI against Minnesota’s nudification technology ban²³. The law took effect as scheduled on August 1. It directly prohibits AI “nudify” services at the state level, with civil penalties that can reach $500,000 per violation¹.

Judge Frank cited the roughly three-month gap between the law’s passage and xAI’s filing, noting that such a delay suggests the claimed harm is not immediate²³. The court converted the TRO motion into a motion for a preliminary injunction, so the substantive fight is still ahead².

What the Law Prohibits

The law (HF1606, now codified in Minnesota statute) bars owners and operators of websites, applications, and software from allowing users to “nudify” images or videos, or from doing so on a user’s behalf. Advertising or promoting such services is also prohibited¹.

Enforcement comes in two forms. The state attorney general can seek civil penalties of up to $500,000 “for each unlawful access, download or use,” with collected penalties funding grants for victims of sexual assault and abuse¹. Separately, individuals depicted in the content can sue, seeking compensatory damages up to three times actual damages, punitive damages, injunctive relief, and attorney fees¹.

State Sen. Erin Maye Quade, who authored the bill, is reported to have done so after hearing from women whose photos were misused². The bill passed the state Senate unanimously and cleared the House with all but one member in support² - a rare degree of bipartisan agreement in a US state legislature.

xAI’s Argument: Free Speech Against Harm Prevention

xAI sued the Minnesota attorney general on July 27 and filed its emergency motion for a temporary restraining order two days later, on July 29⁴. The company argues the law is a “content-based and vastly overinclusive” restriction on First Amendment-protected speech, sweeping in non-sexual expression, consensual expression, and material never disseminated to others²³. Constraints on Grok’s image-editing features sit behind the suit. Engadget reports that Grok generated sexualized images of real women and children through photo transformation requests, and that this continued through April 2026 despite policy changes in January³.

Attorney General Keith Ellison responded to the ruling by saying he is “proud to be in court defending the dignity of Minnesotans”². Ellison’s opposition brief is due August 12 and xAI’s reply on August 17, with a hearing on the preliminary injunction set for August 19². If the injunction is granted the law is paused; if not, enforcement continues alongside the merits litigation.

State Law Moves First, and $500,000 Per Violation Lands on Providers

This sequence illustrates how AI regulation is taking concrete shape at the state level without waiting for federal legislation. In the same week, on August 2, the EU began applying its AI Act transparency obligations, leaving AI service providers to handle divergent regional rules simultaneously. In image generation specifically, platforms are also redrawing guardrails on their own, as when Google pulled Google Earth’s image generation feature a day after launch.

For companies offering image generation or editing, the Minnesota law is a concrete precedent. A penalty structure of up to $500,000 per violation means totals can escalate quickly for services processing large request volumes. As a data point for deciding whether to build regional feature restrictions, abuse detection, and consent verification into product design from the start, the August 19 hearing matters well beyond xAI, which ships Grok. Where the constitutional line falls on “protected speech” in this case is likely to shape how other states draft similar laws.