SpaceX Warns of xAI Regulatory Risks Ahead of IPO

Space Exploration Technologies Corp. disclosed in a regulatory S-1 filing that its subsidiary, xAI, faces global investigations into the creation and dissemination of sexually abusive AI imagery. These disclosures come as the company prepares for a projected $1.75 trillion IPO this summer. The investigations focus on allegations that the Grok chatbot was used to generate nonconsensual explicit images and sexualized content involving children.

Although xAI claimed to have implemented content blocks in January 2026, reports from February and April indicate that Grok continued to generate sexualized images of real people, including actors and pop stars. Regulatory probes are currently active in Brazil, Canada, Britain, Ireland, and California. The Irish Data Protection Commission launched its specific inquiry into the company in February.

Elon Musk has faced additional legal scrutiny amid these probes. He recently ignored a legal summons from French prosecutors regarding allegations of algorithmic abuse and complicity in the distribution of child sexual abuse material. Musk has denied knowledge of Grok producing images of naked underage individuals.