Former OpenAI Staff Warn xAI's Safety Record Could Hinder SpaceX IPO

After Elon Musk's SpaceX acquired xAI in 2025, its private-market valuation climbed above $1 trillion, and the company began planning an IPO that could raise as much as $75 billion. Grok's content-moderation, model-safety and compliance risks are now part of the combined company. Those shortcomings could lead to regulatory penalties, litigation and reputational damage, affecting how investors value the blockbuster IPO.

On May 19, 2026, Guidelight AI Standards, The Midas Project and other AI safety groups published an open letter saying xAI had assigned only two to three people to safety work as of January. Grok had generated thousands of sexualized images of women and children, prompting at least 37 U.S. state attorneys general to demand improvements. The letter called on SpaceX to disclose in its IPO filings whether xAI would continue developing frontier models and how it planned to govern their safety.