US court says private possession of fictional AI-generated child-sex images is protected.

The United States appeals court has ruled that a Wisconsin man cannot be prosecuted for possessing AI-generated images depicting child sexual abuse when the images were created without the involvement of real children and kept privately.

The controversial ruling was made because of existing Supreme Court precedent protecting the private possession of obscene material that does not involve real children.

The Seventh Circuit Court of Appeals upheld a lower court's decision to dismiss the possession count against Steven Anderegg, while leaving other criminal charges against him in place.

According to court documents, Anderegg, 44, allegedly used AI model called Stable Diffusion to create thousands of realistic images of minors.