xAI Loses Second Bid to Block Minnesota's Deepfake Law as Case Heads to the Merits

For the second time in six weeks, a federal judge has refused to freeze Minnesota's deepfake law. U.S. District Judge Donovan Frank turned down xAI's second request for a preliminary injunction in a September 4 order, after denying xAI's first motion in late July. The statute, which fines online services up to $500,000 each time a user accesses an AI-generated nude or partially nude image, remains enforceable. The constitutional fight has only changed tracks.

The judge's reasoning had two parts. He found xAI had not shown it would suffer "irreparable harm" if the law stayed in effect, and he said the "balance of harms" tips "steeply in favor of the State," a phrase Gizmodo reported from the order. Frank also flagged the underlying constitutional questions as "complex" and "deserv[ing] full consideration," a signal that the merits deserve a slower, fuller record than an emergency injunction motion can produce.

The mechanism makes the case unusual. Minnesota's nudification statute, shorthand for AI-generated intimate imagery, was a legislative response to a wave of Grok-generated non-consensual imagery that went viral in December 2025. Where most state deepfake laws punish the act of distributing such material, Minnesota levies fines of up to $500,000 against service providers (apps and online platforms) for each individual access of restricted content. The statute's definition of restricted material explicitly includes the "primary genital area, groin, inner thigh, buttocks, or breast of a human being," broader than what broadcast television permits in prime time. The per-access fine structure means a single viral incident can rack up theoretical liability in the millions if Minnesota users hit a deepfake page. That arithmetic, xAI's lawyers argue, makes the law commercially impossible to comply with without stripping out large categories of legitimate imagery.

xAI's most concrete example in court filings is an image of Illinois Governor JB Pritzker and former New Jersey Governor Chris Christie in a sumo-wrestling context, an image the company says the Minnesota definition could reach even though it depicts clothed public figures in a non-sexual pose. The point, as xAI's filings frame it, is that the law's language does not require nudity, just partial exposure of the listed body parts, and does not require intent. A platform serving Minnesota users therefore has to police the line, with $500,000 per access on the wrong side of it.

The next move is procedural, not substantive. The State of Minnesota has filed a motion to dismiss the case, which under federal rules lets the court dispose of the suit before reaching the merits if the State's arguments succeed. The State will likely argue that xAI lacks standing because the company has not yet been fined, and that the First Amendment claim fails because the law targets commercial distribution of unprotected obscene material rather than protected speech. Briefing on that motion is the court's next chance to test the constitutional questions Frank called "complex."

The federal government has already weighed in. The U.S. Attorney's office filed a Statement of Interest in August, according to court records posted by Courthouse News, signaling Washington's view that the statute may burden protected speech. The Department of Justice has not, however, asked the court to block the law. Bloomberg Law's coverage of the September 4 hearing describes the same balance-of-harms finding, and CBS Minnesota's reporting on the August hearing shows the court pressed both sides on how the per-access fine structure would operate against platforms of different sizes.

None of this settles whether the Minnesota statute violates the First Amendment. It only confirms that xAI will not get the law paused before the court reaches that question. The court's own framing, that the constitutional questions "deserve full consideration," points toward a merits ruling in the near future, and a ruling in this case will be cited by courts in other states weighing whether to copy Minnesota's per-access model.