Musk Elon, CEO of Tesla and SpaceX. /Courtesy of Reuters Yonhap

Minnesota cleared its first hurdle in a lawsuit with xAI over regulating AI-generated nude and sexual images.

Reuters reported on the 4th (local time) that a Minnesota federal district court denied xAI's request for a preliminary injunction to suspend the enforcement of House Bill 1606.

The law regulates generating nude or sexual images with AI and allows liability not only for users but also for app and website operators that provide related services. Service providers that allow the creation of such images of Minnesota residents can face civil penalties of up to $500,000 (about 670 million won) per incident.

xAI, led by Elon Musk, filed a constitutional suit, saying the law violates free speech protected by the First Amendment to the U.S. Constitution. xAI's chatbot "Grok" has faced criticism that its restrictions on generating sexually explicit content are relatively looser than those of other major AI services.

Judge Donovan Frank ruled that xAI did not sufficiently show it would suffer irreparable harm from the law's enforcement. He also considered the timing of the last-minute injunction request and the potential harm from AI-generated content such as nonconsensual sexual images. xAI is said to have indicated it will appeal the decision.

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