The AI industry continues to evolve, and this technology is still very much in its infancy. As artificial intelligence takes over a growing number of fields, new lawsuits are also inevitable. Three new cases highlight how surprising some of these legal issues can be. They also highlight the importance of effective planning when launching an AI startup, as you can never quite tell what kinds of lawsuits you might face in the future. A technology lawyer with AI experience may be able to help address these concerns in various ways. Consider a consultation with one of these legal professionals, whether you are launching a new startup or you are already in the middle of a lawsuit.

Disney’s Lawsuit Against Midjourney Could Determine the Future of Film

In June of 2025, Disney sued an AI company called Midjourney in what MSN called “Hollywood’s first AI lawsuit.” Although this might be a first for Hollywood, the underlying concepts are actually quite familiar. Disney claims that Midjourney infringed upon their intellectual property rights when it began selling images and videos of characters like Yoda, Buzz Lightyear, and Wall-E. These characters are subject to copyrights, which seems to make this a fairly standard IP lawsuit.

Disney is probably doing the right thing by avoiding the legal sinkhole of past AI infringement lawsuits. In the past, many plaintiffs have argued that AI companies illegally gained access to copyright-protected materials in order to train their platforms. However, these arguments have (for the most part) fallen flat in US courts.

Instead, Disney is treating this as a standard copyright infringement lawsuit. As a result, Midjourney will struggle to use the “fair use” defense. Instead, MSN reports that a more likely defense strategy will involve avoiding liability for misuse of its AI image creation tools. In other words, they’re going to claim that it is not their fault that people are using their software to create Yoda memes.

Interestingly, there is some debate over whether Disney is truly fighting for the rights of human creators, animators, and storytellers. Because the studio is not even addressing the issue of training AI on copyright-protected materials, some say that Disney is not ruling out replacing these human creators with its own AI solutions at some point in the future.

Elon Musk Sued After AI Data Center Allegedly Causes Air Pollution

Also in June of 2025, Newsweek reported that Elon Musk was facing a lawsuit due to alleged air pollution caused by one of his AI data centers. This data center is located in Memphis, Tennessee, and its gas turbines are allegedly causing a considerable amount of pollution. Nicknamed the “Colossus,” this computer facility powers the Grok chatbot, which is a product of the “xAI” company.

Many X users ask Grok various questions, and it has emerged as one of the most popular AI solutions, along with ChatGPT and DeepSeek. However, this popularity inevitably leads to more energy requirements, and xAI has been forced to continuously install more turbines to meet these demands.

There is only one problem: Elon Musk seems to have overlooked the need for air quality permits. Either that, or he just does not care. The Southern Environmental Law Center (SELC) issued a notice and decided to sue on behalf of the National Association for the Advancement of Colored People (NAACP). The racial component to this lawsuit is not clear, although the SELC says that people in Memphis are generally low-income individuals who already struggle with considerable air pollution.

The SELC states that they have requested the local health department to investigate this issue, but no investigation has been launched. The aim of the lawsuit is to force Elon Musk to obtain permits. He would then need to come up with some kind of plan to address the air pollution, which would inevitably lead to higher operating costs.

The SELC also claims that the gas turbines are currently emitting nitrogen oxides, formaldehyde, and other chemicals that increase smog production. These chemicals are also linked with respiratory problems and heart disease.

If nothing else, this lawsuit highlights the cost of success for AI companies. Once an AI platform becomes popular, it starts to consume massive amounts of energy. These energy requirements have not yet been addressed by the leading AI companies, and no one really has a plan for generating the increased power needs.

Not only does increased energy consumption lead to higher operating costs, but it also raises new regulatory issues. The possibility of increased air pollution is just one potential example, and there are many other compliance issues that might arise when an AI company faces excessive power consumption needs.

With all that said, one cannot help but wonder whether this lawsuit is somewhat political in nature. It is an undeniable fact that anything Elon Musk touches has become a source of controversy, and it would be interesting to know whether competing AI companies are facing similar regulatory issues. After all, they must be producing similar levels of pollution.

Meta Sues Hong Kong AI Company for “Nudify” Ads

The last notable lawsuit of July 2025 involves Meta and Crush AI. Zuckerberg’s company is suing Crush because of persistent ads that keep showing up on Instagram and Facebook. This is despite the fact that Meta has been trying to exclude the platform, which sells AI-generated, “deepfake” nudes. The tech giant has been taking a hard line against Crush due to complaints about innocent people (including underage girls) who have been “nudified” or declothed using these AI apps.

Meta says that the Hong Kong-based AI company has been switching domains, “cloaking” its ads, and using many other strategies to avoid its ads being banned. This led to 80,000 Crush AI ads being displayed on Meta’s platforms despite its strict ban.

Consult With an Experienced AI Lawyer

Whether you face air pollution lawsuits or challenges from the biggest entertainment companies, an experienced AI lawyer may be able to help. These legal professionals are well aware of the various legal issues a new AI startup might face during its rise to glory. With legal assistance, you can plan effectively for every eventuality and put important safeguards in place. Consider working alongside John  P. O’Brien, a tech lawyer who has considerable experience with AI. Book your consultation today to learn more about the next potential steps.