The US Department of Justice has stepped into a court fight on the side of Elon Musk’s xAI. It is backing the company’s challenge to a Minnesota law that bans AI “nudification” tools. A federal judge heard arguments on Wednesday and said he would rule soon, according to Courthouse News Service.

xAI wants a preliminary injunction to block the law while its lawsuit proceeds. The company sued Minnesota in July, arguing the statute violates the First Amendment. The case is X.AI LLC v. Keith Ellison, the state’s attorney general, before Judge Donovan Frank in the District of Minnesota.

The Justice Department filed a statement of interest on 18 August. It did not take a side on the injunction itself. Instead, it argued that the Minnesota law reaches further than federal law. It also warned that heavy state rules could slow the AI industry.

What the law does

The statute, known as HF 1606, took effect this month. It bars anyone who owns or controls a website, app or software from letting users “nudify” or sexually alter images using AI, according to the bill text. Breaking the rule carries penalties of up to $500,000.

The law is a strict-liability rule. That means a platform can be liable whether or not it knew about or intended the result, xAI said in its complaint. Liability turns only on whether a user managed to create a covered image.

xAI says it already bans this conduct. Its policies forbid users from generating nude or sexualised images of real people without consent. It says it has even sued users who get around its blockers. The company argues the state is treating it the same as a platform that sets out to allow the images.

The courtroom argument

xAI’s attorney, Robert Dunn, told the court the law is too broad. He said the legislature did not weigh the free-speech problems before passing it. The statute has no carve-outs for consent, artistic expression or parody, he argued. As a result, it could punish ordinary, lawful edits.

“The state would punish xAI for allowing a user to nudify themselves,” Dunn said, according to Courthouse News. He said Minnesota could fix the law by focusing on consent and distribution. It could also add a “safe harbor” for platforms acting in good faith.

Minnesota Assistant Attorney General Janine Kimble pushed back. She said terms of service are not enough. xAI is still reporting tens of thousands of users who create such images, she noted. She argued that Grok, the company’s chatbot, and tools like it have no real barrier to entry.

“The repercussions only happen after the fact,” Kimble said. Someone has to see an image, report it and locate it, she said. The user also has to be within reach of a court. The state also cited a figure that around 95% of deepfake images are nonconsensual, sexually explicit depictions of other people.

Why the DOJ stepped in

The federal government’s filing is a statement of interest, a document that lets the Justice Department weigh in without joining as a party. It was signed by Associate Attorney General Stanley Woodward. The filing says Washington shares Minnesota’s goal of fighting sexual abuse imagery, but objects to how the state wrote its law.

The department pointed to federal statutes that target the same harms. Those include the PROTECT Act and the TAKE IT DOWN Act, which President Trump signed in 2025. The TAKE IT DOWN Act sets a notice-and-removal system, giving platforms 48 hours to take down flagged images, and is enforced by the Federal Trade Commission.

Federal law is narrower than the Minnesota rule, the DOJ argued. It requires that an act be done knowingly, it exempts matters of public concern, and it applies when an adult does not consent. HF 1606 has none of those limits, the filing said, and can apply even when an adult makes an image of themselves.

The department gave a concrete example. Federal law would not cover an AI-generated image of a shirtless man in a swimming pool, it wrote, but Minnesota’s law could, because it borrows a broad definition of “intimate part” that includes the inner thigh or a breast.

A federal-versus-state fight

The filing tied the case to the Trump administration’s wider push for light-touch AI rules. It cited executive orders that call for a single national standard rather than, in its words, “50 discordant state ones”. The administration has separately pushed to pre-empt state AI rules in exchange for federal legislation.

“States must be careful not to impose excessive measures that hinder American national and economic security,” the government wrote, citing an executive order on AI. It said federal law already addresses the same conduct.

Other governments are weighing the same question. The European Union is moving to ban nudify apps, and researchers have reported that the underlying tools often sit upstream on services such as Hugging Face. Minnesota says its law targets that harm; xAI says it reaches lawful speech as well.

What happens next

Judge Frank had already denied an earlier request from xAI for a temporary restraining order on 31 July. In that order, the judge noted xAI filed its motion only days before the law took effect, nearly three months after it was signed, which he said undercut the claim of an emergency.

He set an expedited schedule instead, and the two sides argued the injunction on 19 August. Frank took the matter under advisement and said he would rule as soon as possible. For now, the law remains in force, including against xAI, until the judge rules.

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