Elon Musk's bet on "spicy" AI has officially transitioned into a disclosed corporate risk factor. SpaceX acquired xAI three months prior to filing its pre-IPO S-1 paperwork, integrating xAI’s social media platform, consumer chatbot, and the controversial not-safe-for-work (NSFW) features of Grok into its portfolio.
In the filing released Wednesday, SpaceX cautioned that these features could pose "heightened risks" and lead to "reputational harm." The document noted that Grok’s NSFW modes are intentionally "more irreverent and harsher than our standard offerings." The warning specifically highlighted the possible "generation of potentially explicit content," alongside "potential nonconsensual or exploitative imagery" and content that may infringe on intellectual property rights. Such outputs could be categorized as "harmful, harassing, abusive, or discriminatory," according to the S-1.
It is standard regulatory practice for companies to flag potential business risks in pre-IPO documentation, including any active investigations or litigation that could impact material performance. In January, xAI faced significant backlash after Grok was used to create non-consensual sexualized AI images, including those depicting minors, leading to public condemnations from government officials and subsequent lawsuits.
The S-1 filing confirms that SpaceX is currently subject to "investigations and inquiries" within the United States concerning allegations that its AI products were utilized to generate nonconsensual explicit material. As SpaceX prepares for its public debut, the governance and ethical guardrails of xAI’s generative models have become a focal point for investor due diligence.
