The European Commission has launched formal proceedings against Elon Musk’s social media service X over “serious concerns” regarding the platform’s Grok AI chatbot, the latest regulatory headache for the billionaire entrepreneur’s tech projects.
The probe, announced on January 26, 2026, concerns whether X conducted a sufficient risk assessment before launching the contentious image and text generation capabilities of Grok AI across the European Union. This latest regulatory move comes just weeks after the EU imposed a €120 million fine on X for other breaches of digital safety regulations.
EU Launches Formal Inquiry into Grok AI Over Non-Consensual Deepfakes and Systemic Risks
At the root of the investigation is the very disturbing question of whether Grok is using its AI technology to produce non-consensual sexualized deepfakes. This includes very disturbing “undressing” pictures that use AI to strip photos of people, mostly women, and the possibility of producing child sexual abuse images.
The story was originally broken by the German newspaper Handelsblatt on January 25, with three senior officials of the EU predicting that Monday’s announcement would happen.
The action, they said, is intended to pressure Musk’s AI firm xAI into possibly pulling Grok out of the European market entirely.
In addition to the deepfakes, the regulators are also looking into how Grok presents content to users on the X platform and reviewing past controversies, such as when the AI generated antisemitic content.
The Commission has specifically mentioned the platform’s failure to properly address systemic risks with regard to illegal content and gender-based violence.
The EU is not the only body that has raised red flags over Grok’s image generation capabilities. The feature has caused an international stir, leading to outright bans in both Malaysia and Indonesia as countries around the world struggle to come to terms with the implications of ever-more powerful AI tools.
Launch Parallel Inquiries into X over Digital Safety
Prior to launching the formal inquiry, the European Commission had already asked X for information regarding its risk mitigation measures. Finding the company’s answers and measures inadequate, the regulators chose to move forward with a full formal inquiry into the matter under the Digital Services Act.
The fine of €120 million, or about $140 million, in December 2025 was for other DSA infractions, including what was termed “deceptive design” practices on the platform. This fine made it clear that the EU is serious about holding big tech accountable under its new digital rules.
The inquiry is focused on possible breaches of Articles 34(1), 35(1), and 42(2) of the DSA, which impose a rigorous risk assessment and mitigation strategy on very large online platforms before introducing new functionality that may cause harm to society.
If the Commission rules that X is in breach of the DSA, the financial implications could be severe. Under the DSA, fines can be as high as 6% of the global annual turnover of the firm, a potentially staggering fine that could run into billions of dollars, depending on X’s performance.
The UK has now joined the regulatory crackdown, with the country’s communications regulator Ofcom launching a parallel inquiry under the Online Safety Act. This joint scrutiny by the world’s leading democracies indicates that the safety of AI is a concern that crosses national borders.
X, Grok, and the High Stakes of EU Compliance
Typically, formal DSA proceedings would include extensive information requests, potential on-site inspections, and the opportunity for the company to comment on preliminary findings. This process can take months or even years to reach a final decision.
In the case of X and xAI, the consequences of the investigation go beyond financial repercussions. The investigation may impose substantial changes on how Grok functions in Europe or could result in limiting its use within the second-largest economic bloc in the world. Because of the global regulatory power of the EU, any compliance actions taken in the EU will typically become the global standard by default.
This case is an important test of the EU’s new Digital Services Act, which will be applied to the rapidly developing field of AI. As generative AI develops at a breakneck pace, the world’s regulators are scrambling to establish boundaries that protect users from harm while still promoting innovation, a balance that will likely define the industry for years to come.
