Key insights
- A UK lawmaker is suing Elon Musk's xAI over alleged deepfake pornography generated by its Grok AI platform. This lawsuit, coupled with ongoing regulatory scrutiny in multiple countries, raises concerns about AI safety and corporate responsibility. While xAI has made some adjustments to Grok's capabilities, the legal action and potential for further regulatory action could negatively impact investor sentiment towards Musk's ventures, including the anticipated SpaceX IPO, and highlight risks in the rapidly evolving AI sector.

Investing.com -- British lawmaker Jess Asato filed a lawsuit against Elon Musk's xAI on Wednesday, claiming the company's Grok AI platform was used to generate fake sexualized images of her.
Grok, which is available through Musk's social media platform X, faces regulatory investigations in multiple countries following public criticism earlier this year over its role in producing non-consensual sexualized images.
Asato, a member of Prime Minister Keir Starmer's Labour Party, said in a statement that Grok produced deepfake pornography and sexualized content that harmed thousands of women and children.
"Its ability is not an accident, nor misuse, it is a design choice by its creators. In launching this case, I am pursuing accountability for those choices," Asato stated.
xAI is part of Musk's rocket and space exploration company SpaceX, which is expected to launch what could become the largest IPO in history later this month.
In mid-January, xAI announced it had limited image editing capabilities in Grok and prevented users from creating images of people in revealing clothing in jurisdictions where such content is illegal.