A federal appeals court has affirmed the dismissal of a criminal possession charge against Wisconsin defendant Steven Anderegg, ruling that existing Supreme Court precedent protects his private, in-home possession of obscene, entirely AI-generated sexual images depicting children when no actual child was used or identifiable in creating them. The ruling does not legalize producing, distributing, transmitting, or providing such material to minors, and three other charges against Anderegg remain intact. The decision exposes a troubling collision between decades-old First Amendment precedent and generative AI capable of producing photorealistic depictions that judges acknowledged can be virtually indistinguishable from images documenting the abuse of real children. The court made clear that it was bound by Supreme Court decisions protecting private possession of obscenity and distinguishing virtual depictions from material produced through actual child exploitation, while two judges expressly questioned whether those precedents remain workable in the age of advanced artificial intelligence.
Key Takeaways
- The ruling is considerably narrower than declaring AI-generated child sexual abuse imagery broadly “legal”: it holds that the federal possession statute is unconstitutional as applied to Anderegg’s private possession at home of entirely virtual images involving no actual or identifiable children.
- The court emphasized that Supreme Court precedent from 1969 and 2002 controlled the outcome, even though modern generative AI can now create photorealistic material essentially unimaginable when those constitutional rules were established.
- Production, distribution, transmission, and providing obscene AI-generated sexual depictions to minors remain legally distinct from private possession, leaving prosecutors substantial authority while creating a significant gap concerning possession of purely synthetic material.
In-Depth
A federal appeals court has exposed a serious weakness in federal law governing artificial intelligence and child sexual abuse imagery, affirming dismissal of a possession charge against Wisconsin defendant Steven Anderegg while leaving three other charges intact.
The government alleges Anderegg used Stable Diffusion to generate hundreds of photorealistic sexual images depicting prepubescent children. Investigators became involved after an AI-generated image was allegedly transmitted through Instagram to a minor. Prosecutors charged Anderegg with production, distribution, transfer to a minor, and possession of obscene virtual material.
The dispute centered narrowly on possession inside the home. The court concluded that two Supreme Court precedents controlled: a 1969 decision protecting private possession of obscenity and a 2002 ruling distinguishing virtual child pornography from material created through the exploitation of actual children. Because prosecutors conceded that Anderegg’s charged images depicted no actual child and could not be connected to one, the appeals court affirmed dismissal of the possession count.
Importantly, the decision does not establish a general right to manufacture or distribute AI-generated sexual depictions of children. Anderegg still faces the remaining charges.
The larger concern is technological. Judges acknowledged that today’s AI can produce virtual abuse imagery virtually indistinguishable from photographs involving real victims. Constitutional doctrine fashioned when synthetic imagery was comparatively primitive is now confronting technology capable of unprecedented realism.
That leaves the Supreme Court and Congress facing a difficult problem: protecting constitutional limits on government power while determining whether existing law adequately addresses synthetic material designed to portray children being sexually exploited. The court effectively said that rewriting those boundaries is beyond an appellate panel’s authority.
Sources
- https://media.ca7.uscourts.gov/cgi-bin/OpinionsWeb/processWebInputExternal.pl?Path=Y2026%2FD08-25%2FC%3A25-1354%3AJ%3ALee%3Aaut%3AT%3AfnOp%3AN%3A3597567%3AS%3A0&Submit=Display
- https://www.justice.gov/archives/opa/pr/man-arrested-producing-distributing-and-possessing-ai-generated-images-minors-engaged
- https://www.justice.gov/opa/pr/repeat-sex-offender-convicted-child-exploitation-offenses-including-receiving-and-possessing