Elon Musk’s AI company xAI has filed a lawsuit against the state of Colorado seeking to block new regulations it claims would restrict speech generated by its chatbot Grok.
The legal challenge targets Senate Bill 24-205, a law designed to prevent algorithmic discrimination in sectors such as employment, housing and finance, which xAI argues interferes with how its AI systems operate.
“Colorado cannot alter xAI’s message simply because it wants to amplify its own views on the highly politicised subjects of fairness and equity,”
The company said in its court filing.
xAI also argued the law is internally contradictory, claiming it enforces differential treatment in pursuit of diversity goals while limiting the company’s ability to develop a “maximally truth seeking” AI system.
The lawsuit follows a similar legal action by xAI against California over disclosure requirements tied to AI training data, signalling a broader pushback against state-level regulation.
The regulatory tension comes after Grok faced criticism for generating racist, sexist and antisemitic content, prompting lawmakers to introduce safeguards around AI behaviour.
Meanwhile, White House AI adviser David Sacks has called for a unified federal approach, warning that a patchwork of state-level AI rules could hinder innovation and complicate compliance for companies.