SpaceX has disclosed that ongoing investigations into its artificial intelligence subsidiary could threaten the company’s access to key markets, according to regulatory documents obtained by news outlets.
The aerospace company revealed these concerns in an S-1 filing as part of its preparation for a massive $1.75 trillion public offering planned for this summer. The document warns that multiple government agencies worldwide are conducting active investigations into xAI regarding social media practices and artificial intelligence use.
According to the regulatory filing, SpaceX faces “allegations that our AI products were used to create nonconsensual explicit images or content representing children in sexualized contexts.” The company stated that such regulatory scrutiny could result in lawsuits, financial liability, and government enforcement actions, “including loss of access to certain markets, which has occurred in the past.”
The disclosure follows a Thursday presentation to analysts at SpaceX’s Colossus supercomputer facility located in Memphis, Tennessee. Neither SpaceX nor xAI provided immediate responses when contacted for comment regarding the filing.
The controversy centers around xAI’s Grok chatbot, which generated widespread concern after producing sexually explicit imagery that appeared prominently on the X social media platform during late 2025 and early 2026. The artificial intelligence tool created images showing women and minors in revealing clothing or compromising situations.
Research groups estimated approximately 3 million sexualized images were generated, prompting United States lawmakers to demand that major tech companies remove both Grok and X from their application stores. SpaceX Chief Executive Elon Musk stated during that period that he was aware of “literally zero” naked images of underage individuals created by Grok.
XAI announced in January that it had implemented new safeguards to prevent users from requesting sexualized images of real individuals. The company also said it blocks such content generation in regions where such material violates local laws.
However, these protective measures appear to have only partially addressed the problem. Recent reports indicate that Grok continues producing sexualized imagery, including content featuring celebrities and public figures, even when users explicitly state that image subjects have not given consent.
The regulatory filing specifically references an investigation launched by Ireland’s Data Protection Commission in February, though xAI faces scrutiny from authorities across multiple continents. Active probes are underway in Canada, Britain, Brazil, and California, among other jurisdictions.
In France, prosecutors issued a legal summons for Musk to answer questions regarding allegations of algorithmic abuse, fraudulent data extraction, and involvement in distributing child sexual abuse material. Musk failed to appear for the Monday court date.
The market access warning underscores the serious nature of these investigations, particularly those involving alleged child sexual abuse imagery and non-consensual sexual content. Creating such material constitutes criminal activity in numerous jurisdictions, and its distribution often triggers swift public backlash.
X has previously faced market restrictions, including a 2024 ban in Brazil after the platform refused to comply with judicial orders. The company eventually cooperated with authorities, leading to the ban’s removal.
The regulatory disclosure comes as SpaceX prepares for what would be one of the largest initial public offerings in corporate history, making these risk factors particularly significant for potential investors.
