California Attorney General Rob Bonta issued a cease-and-desist order to Elon Musk's artificial intelligence company, xAI, on January 16, 2026, demanding an immediate halt to the creation and distribution of nonconsensual deepfake images generated by its Grok AI model.
The order followed a state investigation into reports that Grok was being used to produce illicit content, including sexually explicit material depicting women and children. In a public statement, AG Bonta said, "The avalanche of reports detailing this material — at times depicting women and children engaged in sexual activity — is shocking and, as my office has determined, potentially illegal." The letter, addressed directly to CEO Elon Musk, demands compliance and evidence preservation by January 20, 2026.
The Attorney General's office cited specific research indicating that over half of 20,000 images generated by xAI between Christmas and New Year's depicted individuals in minimal clothing, some appearing to be children. The state alleges xAI's practices violate several California civil and penal codes, including statutes related to the distribution of child sexual abuse material (CSAM).
This action is part of a broader, intensifying regulatory scrutiny on AI firms concerning child safety. In August of the previous year, AG Bonta joined a coalition of 44 other state attorneys general in sending warning letters to 12 leading AI companies, including Anthropic, Google, Meta, Microsoft, and OpenAI, regarding inappropriate AI interactions with minors.
The event underscores the significant legal and ethical challenges facing rapidly advancing generative AI technology, particularly around privacy and content moderation. While the news centers on AI regulation, it highlights growing governmental pressure on tech companies to implement robust safety protocols, a trend that could influence the operational landscape for any crypto or Web3 projects integrating similar AI tools.
