xAI sues Minnesota over the first US law banning "nudification" apps

xAI has sued the State of Minnesota over HF 1606, the first law in the United States to prohibit apps and websites that generate fake sexualised images of real people. The suit was filed in late July, days before the ban was due to take effect.

The law is aimed at the operators of "nudification" services rather than at the individuals who use them, and sets a penalty of $500,000 for each prohibited image generated. It passed with near-unanimous support: 132-1 in the Minnesota House and 65-0 in the Senate.

xAI argues the statute violates the First Amendment, is overbroad, and imposes strict liability on platform operators regardless of whether they forbid nudification in their terms of service or deploy technical controls against it. The company also argues the penalties are disproportionate, telling the court that a service whose users generated 100,000 prohibited images would face what it called an eye-popping $50 billion.

That last argument is the one worth watching, because it is really an argument about per-image statutory damages as a regulatory design. A per-item penalty scales with model output, and generative systems produce output at a rate no earlier medium did — so a number that looks proportionate per image becomes existential in aggregate. Legislatures elsewhere are drafting to the same template.

A judge has since denied xAI's request to block the law from taking effect. Minnesota's statute had already survived an earlier challenge from the company.