SpaceX has officially cited the NSFW (Not Safe For Work) function of xAI chatbot Grok as a business risk during preparations for an IPO. NSFW refers to content inappropriate for viewing at work and is mainly used as a warning label for adult or provocative videos and images. The company directly acknowledged that generative AI functions for aggressive and adult content could later lead to reputational damage and heavier regulatory burdens.

Business Insider reported on Tuesday that SpaceX said in a draft S-1 registration statement submitted to the U.S. Securities and Exchange Commission that Grok’s NSFW function could bring heightened risk and potential reputational harm to the company.

The disclosure came about 3 months after SpaceX acquired xAI. Through the acquisition, SpaceX folded xAI’s generative AI business, social media platform and consumer chatbot services into its internal business portfolio.

SpaceX said in particular that Grok’s NSFW mode has a “ruder and rougher” character than existing AI services.

The company wrote in the risk factors section that Grok could potentially generate explicit content. It also mentioned the possibility of generating non-consensual sexual images, exploitative images or content that infringes intellectual property rights. It warned that such outputs could be perceived as harassment, discrimination or abusive content, and could lead to social controversy and regulatory pressure.

Legal risks are also already under way. SpaceX said it is receiving investigations and inquiries in the United States over allegations that its AI products were used to generate non-consensual exposure images or content depicting minors in a sexual context.

It also said the company and some subsidiaries have been named as defendants in multiple lawsuits related to Grok’s image generation and editing functions. SpaceX also said it would respond actively to those cases.

The controversy has continued since early this year. In January, xAI faced criticism that Grok generated non-consensual sexual AI images of people, including women and minors. Public criticism from politicians and civic groups followed, leading to policy changes and legal responses. xAI restricted Grok’s image generation function to paid users after the controversy.

European regulators are also looking into related issues. SpaceX said Ireland’s Data Protection Commission is investigating Grok’s generative AI functions within the X platform. Business Insider reported the scope includes the processing of European Union user data and the use of children’s personal information.

The U.S. Federal Trade Commission is also investigating how AI companies verified chatbot safety for children and teenagers. xAI’s AI companion service also includes an animation character-based chatbot called Annie.

SpaceX acknowledged the risks but also highlighted its technological competitiveness. The company compared Grok with major AI companies including OpenAI, Anthropic and Google, and called it “one of the fastest-evolving frontier models.”

In the market, attention is focused on the disclosure as a case in which SpaceX, while accelerating its AI business expansion, detailed related regulatory and reputational risks for the first time in an IPO document. While competing AI companies maintain a cautious stance toward adult generative AI functions, some also say SpaceX and xAI have chosen a more open and aggressive strategy.

In the industry, many see a strong possibility that if generative AI regulation is tightened, NSFW functions and non-consensual image generation will emerge as key risks for AI companies.