Canada just found Elon Musk's Grok guilty of violating privacy laws over sexualised deepfake images

Canada's privacy commissioner has found that xAI's Grok, the artificial intelligence platform owned by Elon Musk, violated the country's federal private sector privacy law by launching an image generation tool that allowed users to create and share sexualised deepfake images without the consent of the people depicted in them.

Privacy Commissioner Philippe Dufresne released the official report on Thursday, June 11, following a probe that began in January 2026. The investigation found that xAI had launched the Grok AI-powered image generation tool without implementing appropriate safeguards from the outset.

"xAI violated Canada's federal private sector privacy law by launching the Grok AI-powered image generation tool without implementing appropriate safeguards from the outset," Dufresne said at a press conference on Thursday.

Dufresne acknowledged, however, that his office does not have the authority to impose fines or order policy changes for xAI. The commissioner can make findings and recommendations but cannot compel the company to act or levy financial penalties under current Canadian law.

xAI has responded to the regulatory pressure by committing to regularly monitor the platform for sexualised deepfakes before an incident is reported, rather than only responding after complaints are filed. The company also rolled out changes before the report was released that would prevent Grok from allowing users to edit images of real people in revealing clothing.

The Canadian findings arrive on the eve of the SpaceX IPO on Friday, June 12, which is set to value Musk's rocket company at $1.77 trillion and push his personal net worth past the $1 trillion mark, making him the world's first confirmed trillionaire. The timing means one of the most commercially significant moments of Musk's business career is accompanied by one of the most significant regulatory findings against his AI company.

The Canadian report is part of a sustained global pattern of regulatory action against Grok. In January 2026, the UK media regulator Ofcom launched an investigation into whether the platform was adequately preventing the creation of sexualised deepfake images. The European Commission condemned the spread of explicit content on X in the same month, calling it appalling and disgusting, and launched a formal probe. Spain launched its own investigation in February. In March, a Dutch court ordered xAI to stop allowing the creation of nude images within the Netherlands. Indonesia and Malaysia went further, fully blocking Grok over sexually explicit AI imagery in January.

In the United States, three teenage girls filed a class action lawsuit in California in March 2026 alleging that xAI had made explicit content part of Grok's DNA, with their lawyers arguing in the complaint that the platform actively enabled content depicting child sexual abuse. The US Senate passed the Take It Down Act in January 2026, which allows victims of deepfake sexually explicit images to sue creators for a minimum of $150,000. Earlier this month, British lawmaker Jess Asato separately sued xAI after sexualised deepfake images of her were created on the platform.

Canada's findings land in the middle of a broader legislative effort. The Canadian government has introduced a digital safety bill aimed at children that, if passed, would ban social media use for those under 16 with exceptions for companies that meet safety standards. The legislation would also create a digital regulator with authority to establish safety standards for AI chatbots including Grok. The bill, if enacted, would give future Canadian regulators the teeth that the current commissioner acknowledges he does not have.

xAI is a separate company from SpaceX, which goes public on Friday, but both sit within the Musk corporate ecosystem. xAI was founded by Musk in 2023 and is privately held. Its Grok AI assistant and image generation tools are embedded within X, formerly Twitter, which Musk acquired in 2022 for $44 billion. The regulatory and legal exposure accumulating around Grok's image generation capabilities represents a governance and reputational risk that exists independently of the commercial momentum surrounding Friday's SpaceX listing.