French prosecutors suspect Musk encouraged deepfakes to inflate X value

French prosecutors said Saturday they had alerted US authorities to a suspicion that tech tycoon Elon Musk had encouraged sexualised deepfakes on X to "artificially" increase the value of his company.

"The controversy sparked by sexually explicit deepfakes generated by Grok (X's AI) may have been deliberately generated in order to artificially boost the value of companies X and X AI," with a view to "the planned June 2026 stock market listing of the new entity created by the merger" between Space X and X AI, the Paris prosecutor's office said.

It said it had reached out on Tuesday to the US Department of Justice, as well as French lawyers at the US Securities and Exchange Commission (SEC), a financial market regulation body, to share its concerns.

Since last year, the French authorities have been investigating X over allegations that its algorithm was used to interfere in French politics.

It now also includes a probe into the Grok AI tool's dissemination of Holocaust denials and sexual deepfakes.

French authorities last month summoned Musk to a "voluntary interview" and searched the local offices of his social media network, in what Musk called a "political attack".

Both Britain and the European Union have also opened investigations into the creation of sexualised deepfakes of women and children by Musk's AI chatbot Grok.