Elon Musk–founded artificial intelligence company xAI has asked a federal judge in California to temporarily block a new state law that would require developers of generative AI systems to publicly disclose information about the data used to train their models.
In a motion seeking a preliminary injunction, the company argues that the statute, which took effect at the start of January, violates multiple provisions of the U.S. Constitution by forcing companies to reveal confidential business information without compensation.
The law requires developers of generative AI tools to publish summaries describing the sources and nature of their training data. California lawmakers said the measure is intended to give consumers more transparency about how AI systems are built and to allow easier comparison between competing services.
xAI, however, contends that the disclosures go far beyond consumer transparency and instead expose highly sensitive trade secrets. According to the filing, details about training datasets are central to a company’s competitive advantage and are closely guarded through internal security measures and confidentiality agreements.
The company argues the statute amounts to an unlawful taking of private property by compelling the disclosure of proprietary information without any mechanism for reimbursement. It also claims the law violates free speech protections by forcing companies to communicate specific information based on the type and purpose of their AI models.
In addition, xAI says the statute is unconstitutionally vague, failing to clearly define which AI systems fall under its scope or how detailed the required disclosures must be. The lack of clear standards, the company argues, creates uncertainty and exposes developers to significant compliance risks.
The company warned that enforcing the law could cause irreversible harm by giving competitors insight into how advanced AI models are trained, potentially undermining innovation in what it described as a rapidly expanding global industry.
California officials have indicated they plan to defend the statute, saying they are reviewing the court filings and will respond through the legal process.
xAI filed the lawsuit late last year against California’s attorney general, asking the court to declare the law unconstitutional and permanently block its enforcement. The case is now pending before the U.S. District Court for the Central District of California.
