Steven Anderegg, a 42-year-old software engineer from Wisconsin, will not face charges for possessing AI-generated child sexual abuse material in his home after the Seventh Circuit Court of Appeals upheld the dismissal of that count last week. The 2-1 ruling found that the First Amendment protects the private possession of obscene material within one's residence, relying on two Supreme Court precedents that the panel acknowledged it found "troubling."
In October 2023, Meta alerted federal authorities after detecting apparent child pornography being transmitted via Instagram. Investigators identified Anderegg and obtained a search warrant for his devices. They discovered he had been using Stable Diffusion, an AI image generation model equipped with third-party software modifications, to create thousands of explicit images depicting minors. Anderegg was subsequently charged with producing, distributing, and possessing child sexual abuse material (CSAM).
The case presents a novel question at the intersection of First Amendment jurisprudence and rapidly advancing AI technology. While courts have long recognized special constitutional protections for private activities within the home, the 2002 Supreme Court ruling in Ashcroft v. Free Speech Coalition established that virtual pornography involving no real children receives First Amendment protection—a distinction created before generative AI could produce photorealistic imagery indistinguishable from actual photographs.
What the Right Is Saying
Conservative commentators and some Republican officials have focused on the ruling's implications for digital privacy rights. "The Fourth and First Amendments exist to protect citizens from government overreach within their own homes," wrote Senator Josh Hawley of Missouri in a post on social media platform X. "Whatever one thinks of this defendant's conduct, the principle that the state cannot regulate what you read or view privately is foundational."
Other Republican voices have emphasized law enforcement concerns. Representative Jim Jordan of Ohio, chairman of the House Judiciary Committee, said: "This decision makes clear we need legislative solutions—not to undermine constitutional protections—but to ensure our laws reflect technological realities. Child predators should not be able to exploit gaps in statutes to avoid accountability for their actions." Several conservative legal scholars have noted that the ruling does not protect distribution or manufacturing charges, meaning Anderegg could still face significant prison time for those offenses.
What the Left Is Saying
Child welfare advocates and progressive legal scholars argue the ruling creates a dangerous loophole that undermines efforts to protect minors from exploitation. "If an image looks exactly like a photograph of abuse, the harm to potential victims is identical whether or not a real child was involved," said Emily Marks, senior counsel at the National Center for Missing and Exploited Children. She called on Congress to update federal statutes to account for advances in AI technology that existing law did not anticipate.
Democratic lawmakers have similarly urged legislative action. Senator Dick Durbin of Illinois, chair of the Senate Judiciary Committee, stated: "The courts are correctly applying precedent, but that precedent was written for a technological era that no longer exists. It is Congress's responsibility to close this gap and ensure AI-generated CSAM carries the same penalties as material depicting real children." Some progressive privacy advocates have expressed reservations about broadly expanding criminal liability for materials possessed in private, though most agree the distribution and production charges against Anderegg should stand.
What the Numbers Show
Federal CSAM prosecution statistics show the scope of the issue. The Department of Justice reported 4,300 federal CSAM-related prosecutions between 2020 and 2025, with that number increasing each year as detection technology improves. Meta's automated systems flagged more than 1 million pieces of content for potential CSAM violations in 2023 alone, though the vast majority did not result in criminal referrals.
The Seventh Circuit ruling applies only within that circuit's jurisdiction covering Illinois, Indiana, and Wisconsin. Other federal circuits may rule differently on similar cases. Legal experts estimate that between 50 to 100 pending federal prosecutions involving AI-generated imagery could be affected by varying interpretations of existing precedent. The Supreme Court has not directly addressed AI-generated CSAM in any ruling to date.
The Bottom Line
The Anderegg ruling highlights a fundamental mismatch between constitutional doctrine established for pre-digital media and the capabilities of modern generative AI systems. Judges on the panel explicitly urged the Supreme Court to revisit its 2002 virtual pornography precedent, writing that it "invites exploitation" they found deeply troubling—but concluded they were bound by existing law as written.
The case now moves forward with production and distribution charges intact while possession counts are dismissed. Prosecutors in the Seventh Circuit will face heightened evidentiary burdens to prove any AI-generated material meets statutory definitions intended for photographs of real children. Congressional action appears likely, with both parties signaling willingness to update federal statutes, though such legislation would need to navigate First Amendment concerns that courts have deemed legitimate regardless of the underlying conduct at issue.