Elon Musk’s xAI Raises $20B Amid Backlash Over Grok AI Deepfakes

Elon Musk‘s xAI has raised $20B in its latest funding around, amid backlash over chatbot Grok creating sexualized imagery of women and children.

The company said the Series F funding round had exceeded a $15B target, with investors including Valor Equity Partners, Stepstone Group, Fidelity Management & Research Company, Qatar Investment Authority, MGX and Baron Capital Group, along with previous investors Nvidia and Cisco Investments.

The raise comes amid a huge backlash over Grok, the X chatbot. Grok Imagine was rolled out late last year, allowing users to create deepfakes, including sexualized images. There have been numerous reports of users asking for non-consensual designs of underage girls, including one in the The Guardian that found a picture of a 14-year-old Stranger Things actor in a bikini.

This prompted a UK government minister to yesterday issue a statement demanding Musk stops Grok from creating the images. British regulator Ofcom has also made “urgent contact with X, which last week issued a warning to users to avoid illegal imagery but has so far not outwardly taken further steps. Regulatory probes are also underway in Malaysia and India, CNBC reported.

xAI said today’s cash raise would “accelerate our world-leading infrastructure buildout, enable the rapid development and deployment of transformative AI products reaching billions of users, and fuel groundbreaking research advancing xAI’s core mission: Understanding the universe.”

In its release today, X didn’t address the controversy over Grok Imagine, but called praised its chatbots “lightning-fast image and video generation models that brings state-of-the-art multimodal understanding, editing, and generation capabilities.”

xAI noted that the latest incarnation of the AI tool, Grok 5, is “currently in training,” and that the company is “focused on launching innovative new consumer and enterprise products that harness the power of Grok, Colossus, and 𝕏 to transform how we live, work, and play.”

xAI has been the parent company of Musk’s social platform, X, following an acquisition in March last year.