SpaceX flags Grok NSFW features as a reputational risk in its pre-IPO S-1 filing

SpaceX acquired xAI three months before it submitted its pre-IPO S-1 paperwork, bringing xAI's social media platform, consumer chatbot and not-safe-for-work Grok AI features under its corporate umbrella.

In the filing, published on Wednesday, SpaceX cautioned that such features could present "heightened risks" and "reputational harm," noting that Grok's NSFW modes are "more irreverent and harsher than our standard offerings."

Explicit content and intellectual property concerns

The S-1 also raised concerns about the possible "generation of potentially explicit content," as well as "potential nonconsensual or exploitative imagery" and material that could infringe on intellectual property. The filing further warned that such content could be perceived as "harmful, harassing, abusive, or discriminatory."

It is standard practice for companies to disclose potential risks to their business in pre-IPO filings, including any ongoing investigations or legal proceedings that could have a material impact on operations.

Backlash over sexualised images of minors

In January, xAI faced widespread condemnation after Grok produced non-consensual sexualised AI images of women, including minors. The incident prompted public criticism from government officials, prompted policy changes and led to legal action.

SpaceX referenced these lawsuits directly in its S-1. The company disclosed that it is subject to "investigations and inquiries" in the United States relating to "allegations that our AI products were used to create nonconsensual explicit images or content representing children in sexualized contexts, and similar matters."

"The Company and certain subsidiaries have been named as defendants in multiple lawsuits arising from Grok's image-generation and editing features," the S-1 reads.

SpaceX stated that it intends to "defend itself vigorously in these actions." Elon Musk has previously disputed claims that Grok generated sexualised AI images of minors, writing in January that he was "not aware of any naked underage images generated by Grok."

Following the backlash, the company made changes to its Grok AI platform, restricting image generation to paying customers. SpaceX also cautioned in the filing that it may face "additional litigation in the future" over such matters.

Grok is positioned as a frontier AI model

Despite the controversy, SpaceX framed Grok in the filing as "among the fastest-advancing frontier models relative to peers, including OpenAI, Anthropic, and Google."

Irish and US regulators also cited

The filing also referenced an inquiry by the Irish Data Protection Commission into the AI company.

"This inquiry involves the processing of personal data of European Union data subjects, including children, using generative AI functionality associated with the Grok model within the X platform," the filing stated.

FTC inquiry into AI companions

xAI also produces a range of AI companion products, including its AI anime character, Ani, which is capable of NSFW interactions. SpaceX disclosed in the filing that it is subject to an inquiry from the Federal Trade Commission concerning how AI companies "have evaluated the safety of their chatbots when acting as companions to children and teens."

Competitors take a different path

Whilst SpaceX has doubled down on Grok's more provocative AI offerings, its rivals have shown greater caution. OpenAI chief executive Sam Altman announced a push into adult content for grown-ups in October, though those plans are currently on hold.