A federal appeals court has ruled that the private possession of AI-generated child pornography is protected by the First Amendment, so long as no real child was involved in creating the images.

The Seventh Circuit upheld the dismissal of a possession charge against Wisconsin resident Steven Anderegg.

According to investigators, Anderegg had hundreds of AI-generated sexually explicit images depicting children on his personal devices.

Anderegg still faces three other charges related to allegedly producing and distributing the material and transferring it to a minor under 16.

The Justice Department appealed the dismissal, arguing that the government should be permitted to prohibit possession of all obscene virtual child sexual abuse material.

However, the appeals court said it was bound by the Supreme Court’s 2002 decision in Ashcroft v. Free Speech Coalition.

Pornography that sexualizes children is not “speech.” AI or not, cyber child sex abuse has no place in our republic. The First Amendment was never meant to shield the grooming of an appetite for kids.

Protect our children damn it. https://t.co/bfnOC7vBzg

— Bethany Miller (@bethanyymmiller) August 29, 2026

That ruling struck down restrictions covering sexually explicit depictions of fictional children when no actual minors were exploited in their production.

Two judges nevertheless expressed serious concerns about applying the nearly 25-year-old precedent to modern artificial intelligence.

“Indeed, in Free Speech Coalition, the Supreme Court addressed the scope of First Amendment protections for virtual CSAM [child sexual abuse material], but that was nearly twenty five years ago, and the image generation technology available today was likely unimaginable back then,” Judge John Lee wrote.

🚨🇺🇸 BREAKING —

US Judge Rules AI Child Porn Is Protected by 1st Amendment. pic.twitter.com/CM6Bm5NL6E

— Pamphlets (@PamphletsY) August 29, 2026

“Given the relentless advancement in artificial intelligence models, we have some concerns about the lines these cases draw, but we are not free to redraw them ourselves.”

The result is a disturbing legal distinction.

Possession of child sexual abuse material involving real children can be criminalized because actual victims were exploited.

But entirely artificial depictions will receive constitutional protection when privately possessed at home.

Judges Lee and Joshua Kolar also cited research findings of child sexual abuse images in a major dataset used to train image-generating AI.

That raises the possibility that supposedly artificial material could still be connected to the exploitation of real children.

Unfortunately, the judges said the issue was not sufficiently developed in Anderegg’s case to decide it.

Justice Clarence Thomas warned about this problem as far back as 2002, suggesting technological advances could eventually make virtual depictions indistinguishable from images involving actual victims.

The decision will now only be reversed if the Supreme Court agrees to revisit its earlier ruling.