SpaceX warns investors that Grok's NSFW AI is risky business

Elon Musk bet big on “spicy” AI. Now, it’s officially a risk factor.

SpaceX acquired xAI three months before it filed its pre-IPO S-1 paperwork. That brought in-house xAI’s social media platform, consumer chatbot — and not-safe-for-work Grok AI features.

In the Wednesday filing, SpaceX said that such features could pose “heightened risks” and “reputational harm” because the Grok NSFW modes are “more irreverent and harsher than our standard offerings.”

The filing warned about the possible “generation of potentially explicit content,” as well as “potential nonconsensual or exploitative imagery” and content that infringes on intellectual property. Such content could also be viewed as “harmful, harassing, abusive, or discriminatory,” the S-1 read.

It’s standard practice for companies to flag potential risks to its business in its pre-IPO paperwork, including any ongoing investigations or lawsuits that could have a material impact.

In January, xAI faced backlash after Grok created non-consensual sexualized AI images of women, including minors. The images sparked public condemnations from government officials, policy changes, and lawsuits.

SpaceX referenced these lawsuits in the S-1 filing. The company is subject to “investigations and inquiries” in the US concerning “allegations that our AI products were used to create nonconsensual explicit images or content representing children in sexualized contexts, and similar matters,” it read.

“The Company and certain subsidiaries have been named as defendants in multiple lawsuits arising from Grok’s image-generation and editing features,” the S-1 reads.

SpaceX said it intends to “defend itself vigorously in these actions.” Elon Musk has previously pushed back on claims that Grok generated sexualized AI images of minors, stating in January that he was “not aware of any naked underage images generated by Grok.”

The company made changes to its Grok AI following the backlash, limiting image generation to paying customers.

The company also warned that it may be subject to “additional litigation in the future” surrounding such topics.

The company also framed Grok as “among the fastest-advancing frontier models relative to peers, including OpenAI, Anthropic, and Google.”

The SpaceX filing also referenced the Irish Data Protection Commission’s inquiry into the AI company.

“This inquiry involves the processing of personal data of European Union data subjects, including children, using generative AI functionality associated with the Grok model within the X platform,” the filing read.

XAI also produces a variety of AI companions, like its AI anime character, Ani. In the filing, SpaceX warned about an inquiry from the Federal Trade Commission about how AI companies “have evaluated the safety of their chatbots when acting as companions to children and teens.”

While SpaceX had doubled down on Grok’s “irreverent” AI offerings, its competitors have shied away. OpenAI CEO Sam Altman announced a push into “erotica for adults” in October; the plans are on hold.