Saint Paul, Minnesota - Elon Musk's company xAI is suing the state of Minnesota over its law banning technology on websites and apps that can create fake nude images of real people.

The law, set to come into effect on Saturday, will make Minnesota the first US state to outlaw technology that allows people to use artificial intelligence programs like Grok and ChatGPT to make nude deep-fake images of people.

Musk's xAI, however, launched a lawsuit on Monday against the state – whose government voted in favor of the legislation in May – claiming the law will unfairly target companies for the actions of their users.

While xAI says it is in favor of a ban on the distribution of AI-generated nude images that have been created without the person's consent, the legislation "extends far beyond that goal."

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Under the rules, xAI could face a potential penalty of $500,000 for each violation. Additionally, the lawsuit argues there is no "safe harbor" provision to protect companies that make good-faith efforts to prevent such content.

Additionally, xAI drew issue with the legislation's definition of "intimate part" for being overly broad.

The lawsuit comes as Musk and xAI continue to suffer the fallout of a major scandal in which their AI program Grok was accused of producing deepfake naked images of children and women without their consent.

Minnesota Attorney General Keith Ellison confirmed in a statement cited by the Guardian that his office hasn't received the lawsuit.

"Using AI to generate nude images of people against their will is appalling," he wrote on X. "There are plenty of worthy debates to have about AI policy. This is not one of them."

"AI nudification robs the target of their dignity and can cause immense harm on an emotional, personal, and professional level," he said. "I'll see X in court."