xAI faces a class-action lawsuit from three girls in Tennessee whose real photos were transformed into child sexual abuse material using Elon Musk's Grok AI. The lawsuit alleges the tech giant intentionally designed Grok to profit from sexual content involving minors, with plaintiffs estimating "at least thousands" of children were victimized. This came to light after a Discord user notified victims and police of explicit AI-generated images circulating online.

Researchers previously estimated Grok generated approximately three million sexualized images, including about 23,000 depicting apparent children. Instead of fixing the issue, xAI limited access to paying subscribers, keeping shocking content off its main platform while continuing to license the technology to third-party apps that could still produce explicit content. Musk publicly denied knowledge of such images despite evidence to the contrary.

The lawsuit describes extensive harm to victims, including emotional distress and fear of stalking. Legal representatives for the plaintiffs argue xAI knowingly hosted and distributed CSAM through third-party arrangements, potentially violating child pornography laws. With criminal investigations now underway, the case threatens to expose how xAI may have profited from exploitation while shifting blame to users who abused its technology.