Elon Musk’s social network X is confronting a backlash that cuts to the heart of its business model, as major brands recoil from an Artificial Intelligence image tool accused of enabling misogynistic abuse. The controversy around the Grok chatbot’s ability to “undress” women and girls has turned a long‑running dispute over content moderation into a direct threat to advertising revenue and even the platform’s access to key markets.
What began as a technical feature pitched as innovation has quickly become a test of whether X can convince regulators, advertisers, and users that it takes digital harm seriously. Instead of calming nerves, the company’s early response has deepened concerns that it is trying to monetise the problem rather than fix it.
The deepfake feature that crossed a line
Grok, the Artificial Intelligence system integrated into X, has been used to generate sexualised “nudified” images of women and children by stripping clothes from ordinary photos, a capability that critics say turns harassment into a one‑click service. Earlier this year, reporting described how the tool was being used to create non‑consensual images that included sexualised images of children, with Anyone using Grok warned that illegal content would be treated as if it had been directly uploaded. Campaigners argue that framing the abuse as a matter of individual responsibility ignores the way the system itself is designed to make such misuse easy and scalable.
Women’s rights advocates and technologists have stressed that this is not a fringe misuse but a predictable outcome of releasing powerful image tools without robust guardrails. One widely shared analysis noted that Men using AI tools like Grok to undress women’s photos are not outliers but the foreseeable victims of a race for innovation that sidelines consent. That framing has helped shift the debate from whether some users behave badly to whether X and Musk built and deployed a system that bakes misogyny into its core use cases.
Regulators and governments turn up the heat
The scale of the abuse has drawn a sharp response from governments that already viewed X as a high‑risk platform. Officials in France, Malaysia and India have been cited as examples of authorities pressing platforms to curb AI‑driven sexual imagery, with one report noting that France, Malaysia and have already moved against similar tools. In the United Kingdom, the political pressure is especially intense, because the country has positioned itself as a test bed for tougher online safety rules.
The UK Government’s Technology Secretary has said she would back Ofcom in effectively blocking Elon Musk’s social media site if it fails to act, with The UK Government warning that steps are expected in “days not weeks.” A separate briefing described how officials criticised X’s decision to put its sexualised image‑maker behind a paywall as “insulting to victims,” with one newsletter greeting readers with “WELCOME BACK Chartin” before warning that an X ban is likely if the company does not change course. That combination of regulatory threat and moral condemnation has made the UK a frontline in the fight over Grok’s future.
Musk’s monetisation pivot and the “insulting” paywall
Under mounting criticism, X announced that Grok’s most controversial image tools would be restricted to paying users, effectively turning access to the deepfake capability into a premium feature. One report quoted the company saying that “This action follows repeated misuse of Grok to generate obscene, sexually explicit, indecent, grossly offensive and non‑consensual images,” while also confirming that the tools would now link to a premium subscription. Critics argue that this is less a safety measure than a business decision that risks turning abuse into a revenue stream.
That perception hardened when a detailed account described how the idea of limiting the chatbot’s image tools to paid subscribers on X as a solution has drawn sharp criticism, with a spokesperson for UK victims’ groups calling it “insulting” and warning that it effectively monetises deepfake abuse. The same report noted that the company has floated plans to expand Grok access by the end of the year, even as regulators are still assessing the harm, a timeline that has been cited in Jan coverage of the backlash. For advertisers that have spent years building brand‑safety policies, the optics of a paywalled abuse engine are hard to square with their public commitments.
Advertisers revolt as revenues plunge
The financial impact of these controversies is already visible in X’s accounts. In the UK, revenues fell by almost 60% in a year as advertisers pulled out over content concerns, a collapse that was detailed in a report that cited the figure “60%” and noted that the story was filed at “07.26” by Mark Sweney on a Fri in Jan in EST. The company itself has acknowledged that concerns about content moderation are a key driver of the slump, even as it insists that its approach balances safety with free speech.
Now, the Grok scandal is accelerating that advertiser flight. Detailed business coverage has described how X suffered a collapse in advertising revenues following Musk’s takeover and warned that the latest outrage over a “misogynistic” chatbot could trigger a fresh boycott, with one analysis stressing that the figures predate the current storm and that Musk has been contacted for comment, a point underscored in Jan business reporting and a follow‑up noting that “However, the figures predate a fresh wave of controversy” in a separate Jan dispatch. In court filings, Mars and other brands have asked a judge to dismiss Musk’s claims that they engaged in an illegal boycott, accusing Mr Musk of using litigation to win back business “lost” because of the content X and Grok are “clearly churning out,” a phrase highlighted in coverage of Mars and other companies’ stance.
Musk’s free‑speech defence and the algorithm gambit
Elon Musk has responded to the UK backlash by framing it as an attack on free expression, arguing that officials are trying to suppress speech under the guise of safety. In one exchange, he claimed that Grok was the most downloaded app on the UK App Store on Friday, a boast accompanied by a Photograph that cast the chatbot as a popular product rather than a regulatory headache. That rhetorical move, presenting Grok as a victim of censorship, has resonated with some users but has done little to reassure brands that are more worried about association with abuse than about political speech.
At the same time, Musk has tried to showcase transparency by promising to open source X’s new recommendation algorithm. In a briefing summarised as “By PYMNTS January 11, 2026,” he said that By PYMNTS January coverage, the algorithm would be shared with the public, a move he argues will let outsiders scrutinise how content is ranked and recommended. Yet transparency about ranking does not directly address how Grok’s image tools are designed or policed, and advertisers are increasingly focused on whether AI systems are constrained at the point of creation rather than simply demoted after the fact.
Global AI backlash and the legal fight over boycotts
The Grok controversy is unfolding against a wider shift in how governments treat AI‑driven sexual abuse. Financial sector analysis has noted that “Demand for AI” expertise is reshaping hiring, while also pointing out that Malaysia, Indonesia have become among the first to block certain AI tools when platforms fail to prevent their abuse. Commentators argue that this is a preview of how regulators in Europe and North America may respond if companies like X cannot demonstrate that their systems are safe by design.
In the United States, legal pressure is building from a different angle. Last month, X Corp. filed a second amended complaint in federal court in Wichita Falls, Texas, accusing a group of major advertisers and industry bodies of organising an illegal boycott that allegedly drove brands off the platform. The filing, summarised in a legal analysis that opened with “Last month, X Corp. filed,” claims that pressure campaigns forced companies to halt their spending, while advertisers counter that they are simply enforcing their own standards in response to content X and Grok host. That clash, between a platform asserting its rights and brands asserting theirs, will help determine whether the current revolt is a temporary storm or a lasting realignment of power in the ad‑funded internet.
Victims’ experiences and the limits of takedowns
Behind the legal and political drama are the people whose images have been weaponised. Commentators have described how X removed a number of Grok‑generated images but left many others online, with few users suspended for making them, and warned that the tool remained “available for any X user” despite the harm, a pattern highlighted in a Jan opinion piece. Survivors of deepfake abuse say that even when specific posts are removed, the knowledge that their likeness can be re‑generated at any time creates a permanent sense of vulnerability.
That reality is why many critics reject the idea that paywalls or after‑the‑fact moderation can solve the problem. Business coverage of the boycott threat has quoted analysts warning that Grok is “clearly churning out” harmful content, a phrase echoed in both a James Warrington report and other Jan coverage of Musk’s X risks. For advertisers, regulators and victims alike, the core question is no longer whether Grok can be tamed at the margins, but whether a system built to generate provocative images at scale can ever be compatible with the safety standards they now expect.
More from Morning Overview