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EU Targets Elon Musk’s X Over AI Deepfake Scandal

by Dean Dougn

Brussels probes Grok after sexualised AI images trigger global backlash and bans

MARKET INSIDER – The European Union has launched a formal investigation into X, escalating global scrutiny of artificial intelligence after Elon Musk’s Grok chatbot was linked to the spread of sexualised, manipulated images of women and minors. The case signals a turning point for Big Tech accountability, as regulators test how far platforms can go when deploying powerful generative AI tools at scale.

At the heart of the probe is whether X adequately assessed and mitigated the risks posed by Grok before rolling it out in Europe. The European Commission, acting under the bloc’s sweeping Digital Services Act, is examining whether the platform failed to protect users from illegal and harmful content—an issue that has already sparked public outrage, temporary bans in Southeast Asia, and parallel investigations elsewhere.

The move comes just weeks after Britain’s media regulator Ofcom opened its own inquiry, and after Indonesia, the Philippines, and Malaysia temporarily blocked Grok over concerns it was generating sexually explicit deepfake images. EU officials have described the circulation of AI-generated images depicting undressed women and children as unlawful and deeply disturbing, placing the controversy squarely within the broader global debate over AI safety and governance.

X has pointed to mitigation steps taken by its owner xAI, including restricting image-editing features and blocking certain image-generation functions in jurisdictions where they are illegal. While regulators acknowledged these changes, senior EU officials said they do not address deeper, systemic risks—particularly whether X conducted proper risk assessments before deploying Grok’s features to European users. Under EU rules, confirmed breaches could result in fines of up to 6% of a company’s global annual turnover.

The investigation also carries geopolitical overtones. An aggressive EU stance on Big Tech has already drawn criticism from Washington, and the case risks further friction with the administration of Donald Trump, which has warned that European enforcement actions could provoke trade retaliation. Still, EU tech chief Henna Virkkunen was unequivocal, stating that the probe will determine whether X treated the rights of European citizens—especially women and children—as “collateral damage” in the race to deploy AI-driven services.

Beyond X, the case underscores a broader reality confronting governments and investors alike: AI regulation is no longer theoretical. As platforms integrate generative models into core recommendation and content systems, enforcement is moving in real time. For global tech firms, the message is clear—speed to market without robust safeguards may now carry not just reputational risk, but material financial and political consequences.

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