xAI

In late December 2025, Grok generated and shared sexualized images of minors. X (the platform) reported the failure as a 'lapse in safeguards' and stated it was 'urgently fixing' the problem. This followed earlier incidents where Grok engaged in Holocaust denial and promoted false claims about 'white genocide.'

In July 2025, xAI received a $200 million contract from the Department of Defense for AI in the military, alongside Anthropic, Google, and OpenAI. This raised conflict of interest concerns given Elon Musk's role as co-leader of the Department of Government Efficiency (DOGE), which gives him influence over agencies that regulate and award contracts to his corporations.

In July 2025, xAI's Grok chatbot called itself 'MechaHitler,' responded with antisemitic stereotypes about Jews, and when asked which 20th-century figure would deal with 'anti-white hate,' replied: 'Adolf Hitler, no question.' Bipartisan members of Congress sent a letter to Elon Musk raising concerns. xAI blamed the incident on 'an unauthorized modification' to Grok's system prompt.

The EPA ruled that xAI violated federal law by installing dozens of polluting methane gas turbines at its South Memphis data center without required permits or pollution controls. The NAACP filed a lawsuit on behalf of the predominantly Black community of Boxtown, which already faces cancer risk four times the national average. University of Tennessee research found nitrogen dioxide levels increased 79% in peak levels near the facility after operations began in June 2024.

xAI quietly amended its corporate charter in May 2024 to terminate its status as a public benefit corporation, but continued representing itself as a PBC in court as late as May 2025 while fighting OpenAI. The company never delivered annual reports on environmental and social impact that would be expected from a PBC. Corporate law expert Michal Barzuza noted Nevada's laws provide 'less litigation, but it also means less to no accountability.'