Save StorySave this storySave StorySave this story<\/p>\n
SpaceX warned investors that AI features such as Grok\u2019s \u201cSpicy" and \u201cUnhinged\u201d modes, which allow the chatbot to generate raunchy image or voice responses with fewer safety filters, could expose the company to regulatory scrutiny and reputational damages, according to a filing submitted Wednesday as part of the company\u2019s planned initial public offering.<\/p>\n
As of December, SpaceX had set aside $530 million for potential litigation losses, some of which could stem from ongoing complaints filed against its AI unit over sexualized imagery generated by its Grok chatbot.<\/p>\n
The disclosures show how SpaceX took on new financial and reputational risks when it acquired Elon Musk\u2019s artificial intelligence startup xAI in February, a deal which sent the rocket maker\u2019s private valuation soaring to over $1 trillion. In the filing, SpaceX repeatedly claims that xAI\u2019s mission is to develop \u201ctruth-seeking artificial intelligence.\u201d In practice, that has often meant launching AI features with minimal guardrails. While Grok\u2019s free-wheeling nature is often framed by Musk as a selling point, it has landed xAI in hot water with regulators.<\/p>\n
Disclosing potential business risks is a routine and legally required part of IPO filings, and some of the concerns outlined by SpaceX may never materialize. The company is one of a number of chatbot makers that is being scrutinized by regulators as governments grapple with the societal impacts of generative AI tools.<\/p>\n
Got a Tip?<\/strong><\/th>\n<\/tr>\n<\/thead>\n\n| Are you a current or former SpaceX employee who wants to talk about what's happening? We'd like to hear from you. Using a nonwork phone or computer, contact the reporters securely on Signal at mzeff.88 and peard33.24.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n | SpaceX disclosed in the filing that it is currently under investigation in the United States and other countries over allegations that Grok was used to create sexualized imagery of apparent minors. The company also noted that it\u2019s the defendant in several ongoing class action lawsuits, and that future "misuse\u201d of its AI products could expose it to more regulatory sanctions, \u201cincluding loss of access to certain markets, which has occurred in the past.\u201d<\/p>\n Some of SpaceX\u2019s AI products, including Grok\u2019s Spicy and Unhinged modes, are \u201cdesigned to generate more candid, direct, or less reserved or irreverent outputs,\u201d notes the filing. \u201cBecause 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, intellectual property infringement, or content that could be viewed as exploitative, harmful, harassing, abusive, or discriminatory.\u201d<\/p>\n SpaceX also disclosed to investors that Grok and X have about 550 million combined monthly users as of March 31, according to the filing. Of those, 117 million use Grok\u2019s AI features each month. In comparison, OpenAI says ChatGPT has more than 900 million weekly users.<\/p>\n Whether the risks posed by Grok and X are worth the headache may be one of the significant questions investors will have to wrestle with ahead of the SpaceX IPO. Earlier this week, a group of nonprofits warned that xAI\u2019s poor safety record could become a liability for SpaceX investors.<\/p>\n SpaceX\u2019s AI unit, which includes X and xAI, is a drag on the rest of the company, with an operating loss of more than $6.3 billion last year. Sales of ads, data, and subscriptions are growing, but not at a pace that would quickly turn the division profitable. One bright spot for SpaceX\u2019s AI efforts is its deal with Anthropic, which has agreed to pay $15 billion a year for access to the company\u2019s data centers.<\/p>\n The AI division's revenue rose to $3.2 billion in 2025, up about 22 percent from the year before. SpaceX attributed part of the surge to increased sales of ads on X. But in this year\u2019s first quarter, ad sales plummeted by $100 million. The company described the drop as a temporary issue caused by an overhaul of its advertiser tools.<\/p>\n The company\u2019s services business is faring better. Revenue from subscriptions to Grok and X jumped by $365 million last year and $177 million in just the first three months of this year. SpaceX did not disclose the number of subscribers to each of the services. In the US, Grok starts at $10 monthly and X Premium at $3 monthly.<\/p>\n","protected":false},"excerpt":{"rendered":" Save StorySave this storySave StorySave this story SpaceX warned investors that AI features such as Grok\u2019s \u201cSpicy" and \u201cUnhinged\u201d modes, which allow the chatbot to generate raunchy image or voice responses with fewer safety filters, could expose the company to regulatory scrutiny and reputational damages, according to a filing submitted Wednesday as part of the […]<\/p>\n","protected":false},"author":1,"featured_media":50857,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":{"0":"post-50856","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"_links":{"self":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/50856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/comments?post=50856"}],"version-history":[{"count":0,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/50856\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media\/50857"}],"wp:attachment":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media?parent=50856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/categories?post=50856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/tags?post=50856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} |
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