xAI sues to block Colorado AI law as Grok faces deepfake suits

xAI filed a federal lawsuit Thursday seeking to stop Colorado from enforcing SB24-205 when the law takes effect on June 30. The company asked a court for an injunction and a declaration that the statute is unconstitutional.

SB24-205 requires developers and deployers of regulated AI systems to disclose risks and take steps to prevent algorithmic discrimination in areas including employment, housing, healthcare, education and financial services.

In its complaint, xAI contends the law would force changes to how its Grok chatbot generates responses. The filing argues the statute violates the First Amendment by compelling speech and would require developers to alter model outputs to align with state-selected viewpoints.

Attorneys for xAI wrote in the filing: “SB24-205 is decidedly not an anti-discrimination law. It is instead an effort to embed the State’s preferred views into the very fabric of AI systems. Its provisions prohibit developers of AI systems from producing speech that the State of Colorado dislikes, while compelling them to conform their speech to a State-enforced orthodoxy on controversial topics of great public concern.” The complaint adds that the state “may not compel [xAI] to speak its own preferred messages.”

The complaint also argues the law is vague, would reach beyond Colorado by regulating models used nationwide, and would favor systems that promote certain notions of “diversity” while penalizing others.

xAI asked the court to block enforcement of the law while the case proceeds. The company requested that the court declare SB24-205 unconstitutional and issue an injunction preventing Colorado from applying the statute to xAI.

The lawsuit arrives as several states have introduced AI rules and the federal government works on a national AI regulatory framework. xAI framed its challenge as a defense against state-level mandates that it says would affect model outputs.

Separately, Grok is the subject of multiple civil lawsuits and investigations over image-generation features. In March, a class-action complaint filed by three Tennessee minors alleged Grok produced explicit images depicting them without consent. Baltimore sued xAI, saying Grok generated up to 3 million sexualized images in days, including thousands that allegedly depicted minors.

xAI did not provide a public comment beyond the court filing. Colorado lawmakers enacted SB24-205 to regulate systems they consider high risk for harms such as discriminatory outcomes and threats to safety; supporters say the law’s disclosure requirements and safeguards are intended to protect consumers and vulnerable populations, while opponents argue state-by-state rules could create conflicting obligations for technology companies.