xAI lands $20B funding, but Grok chatbot sparks backlash

Business Jan 07, 2026

Elon Musk's AI startup xAI just pulled in a massive $20 billion from big names like NVIDIA and Fidelity—way above their original goal.
But even with all this cash, the company is under fire because its chatbot, Grok, has been generating some pretty troubling content.

Why everyone's talking about Grok

Grok has been called out for creating non-consensual and sexualized images, including some involving minors.
French officials say this might break EU laws, and the UK's tech secretary slammed Grok for making deepfakes.
These issues come on top of earlier accusations about antisemitic outputs.
Despite all this, xAI says it'll use the new funds to upgrade its AI models and expand data centers.