Baltimore’s lawsuit against Elon Musk’s xAI and its Grok chatbot could decide how far cities can go to regulate artificial intelligence in the absence of federal law, according to one expert.
“These deepfakes, especially those depicting minors, have traumatic, lifelong consequences for victims,” Baltimore Mayor Brandon M. Scott said in the statement.
"This lawsuit can be seen as a strategic move by a city to regulate AI in the absence of federal legislation, using consumer protection and public harm doctrines to bring AI companies within its enforcement ambit," Ishita Sharma, managing partner at Fathom Legal, told Decrypt.
“On liability, while users prompting harmful content will be part of the argument, the stronger legal focus is likely to be on whether the AI system itself materially contributed,” Sharma said, adding that if courts view Grok “as an active creator rather than a passive intermediary,” responsibility will fall more heavily on xAI.
The Baltimore suit alleges the companies "designed, marketed, and deployed" Grok, knowing it could generate non-consensual intimate imagery and material resembling child sexual abuse content, while publicly claiming such content was prohibited.
"X is now one of the largest distributors of NCII and CSAM," the lawsuit reads, citing the defendants' own platform policies banning such content as evidence of deceptive misrepresentation.
“Evidence of delayed safeguards or inaction in the face of known risks would strengthen claims of negligence or recklessness,” Sharma said, adding that dismissal of the suit appears unlikely, with settlement the most probable outcome, though the case could still result in “a precedent-setting ruling on AI accountability.”
The city is seeking civil penalties, injunctive relief to halt the unlawful conduct, restitution for affected residents, and disgorgement of ill-gotten profits.
Decrypt has reached out to Musk via xAI and SpaceX for comment.
