Elon Musk's AI venture xAI announced it raised $20 billion in its latest funding round, despite global criticism over its flagship chatbot Grok allegedly producing non-consensual sexualized images of women and children.
According to xAI, the "Series E" round surpassed the initial $15 billion target. Investors include tech giant Nvidia, Fidelity Management, the Qatar Investment Authority, and Valor Equity Partners. The company said the funds would be used to develop AI models and expand its data centers in Tennessee, with a core mission of "understanding the universe."
Despite its funding success, xAI faces intense scrutiny over security flaws that allowed Grok to generate non-consensual sexualized (deepfake) content.
In the past week, tens of thousands of users reportedly input commands to digitally "undress" women or create inappropriate poses. Victims reportedly include Ashley St Clair, mother of one of Elon Musk's children, and Grok is alleged to have manipulated images of children as young as 10–12 years old.
Governments have started taking action:
France: Officials filed complaints with prosecutors to examine potential violations of the EU Digital Services Act.
United Kingdom: Technology Minister Liz Kendall described the images as "horrifying and unacceptable" and urged the media regulator Ofcom to intervene.
Australia, India, and Malaysia: Online safety regulators launched investigations, citing Grok's failure to prevent the spread of child sexual abuse material and non-consensual content.
While Elon Musk stated that those producing illegal content would face consequences, experts emphasize that Grok's safeguards are inadequate and the system continues to produce such material.
