xAI, Elon Musk's artificial intelligence company, has filed a lawsuit against the US state of Minnesota to block a law banning "nudification" technology, arguing it is unconstitutional and would leave the firm exposed to potentially billions of dollars in fines. The move comes as xAI's chatbot Grok faces mounting scrutiny after users were arrested for allegedly using it to generate child sexual abuse material (CSAM), prompting lawsuits from children and families demanding safeguards be strengthened, while xAI itself has begun suing users it accuses of circumventing its protections.

Minnesota's law, due to take effect on 1 August, would fine companies up to $500,000 (roughly £395,000) for every harmful image generated in the state, with no requirement that the image be distributed and no safe harbour for firms like xAI. The company argues this could theoretically expose it to fines running into the tens of billions of dollars, given that some users are accused of generating thousands of abusive images of a single victim. Separately, xAI was sued last week after alerting police to an Arkansas photographer accused of using Grok to sexualise images of hundreds of child clients, including a 10-year-old claimant, with more lawsuits reportedly being prepared. xAI says it would rather rely on its existing terms of use than change Grok's image-editing features, but claims the threat of huge penalties leaves it "no practical choice" but to restrict the tool once the law takes effect.