US appeals court blocks Minnesota law banning AI-generated fake nude images in xAI lawsuit

On October 2, 2026, the 8th US Circuit Court of Appeals in St. Louis granted xAI's request for an injunction, temporarily halting Minnesota's first-in-the-nation ban on AI-generated fake nude images. The law, effective August 1, prohibits creating realistic images of intimate body parts not in the original photo. xAI, led by Elon Musk, argues the law violates free speech. A lower court had previously rejected xAI's bid, but the appeals court put the law on hold while the lawsuit proceeds. Minnesota had urged the court to keep the law, citing concerns about child sexual abuse material.