SpaceX revealed potential business and regulatory risks linked to its AI features, including Grok’s “Spicy” and “Unhinged” modes, which have fewer safety filters and may produce explicit or misleading content, according to its IPO filing earlier this year [1, 2]. The filing warned, "Because these modes may be more irreverent and harsher than our standard offerings, they present heightened risks, including reputational harm, the generation of potentially explicit content and misinformation or deceptive outputs, potential nonconsensual or exploitative imagery," among others [1].
As of December 2025, SpaceX set aside $530 million for probable litigation losses tied in part to complaints about Grok’s sexualized imagery, the company disclosed [1, 2]. SpaceX and its AI platform Grok are under investigation in the US and other countries for allegations that Grok was used to create sexualized images of apparent minors [1]. According to the filing, the “Spicy” Imagine Mode and “Unhinged” Voice Mode have prompted controversy and legal probes due to their reduced safety guardrails [2].
SpaceX acquired Elon Musk’s AI startup xAI in February 2026, boosting its private valuation to more than $1 trillion [1]. The social media platform X, owned by xAI, has around 550 million monthly active users, with Grok’s AI features used by approximately 117 million people each month [2]. In the quarter ended March 31, 2026, Grok’s Imagine tool generated about 10 billion images and over 2 billion videos monthly, reflecting rapid user engagement [2].
Financial disclosures show xAI’s operating loss reached $6.35 billion on $3.2 billion revenue in 2025, with a continuing loss of $2.47 billion on $818 million revenue in the first quarter of 2026 [2]. SpaceX cautioned that misuse of AI products like Grok could lead to regulatory sanctions, including loss of market access [1].
The company continues to address ongoing investigations and financial challenges as it prepares to move forward with its IPO.
