xAI Loses Bid to Halt California AI Data Disclosure Law

Elon Musk’s artificial intelligence company xAI failed to convince a California federal court on Thursday to temporarily block the state’s law requiring companies to disclose information about the data they use to train AI models.

U.S. District Judge Jesus Bernal in Los Angeles said that xAI had not yet shown it was likely to prove the law violated its free-speech rights or was otherwise unconstitutional.

Spokespeople for xAI did not immediately respond to a request for comment on the ruling. A spokesperson for the California Department of Justice said the department “celebrates this key win and remains committed to continuing our defense” of the law.

California’s law, enacted by Governor Gavin Newsom in September 2024, requires generative AI companies to publicly post a summary of the datasets used to train their systems. The data transparency law went into effect on January 1, and is part of the state’s broader push to regulate AI companies.

xAI sued the state in December. It argued the law violated its free-speech rights under the U.S. Constitution and would force the company to reveal trade secrets about how its AI models are trained.

Bernal on Thursday denied xAI’s request for a preliminary injunction to halt the law’s enforcement, finding the company had not shown at this stage in the case that its lawsuit was likely to succeed.

(Reporting by Brittain in Washington; Editing by Aurora Ellis and Bill Berkrot)