French Prosecutors Suspect Musk Fueled Deepfakes to Boost Valuations

French prosecutors have notified U.S. authorities of suspicions that Elon Musk deliberately fueled a controversy over sexualized deepfakes on his social media platform X to artificially inflate the value of his companies ahead of a planned stock market listing.

The Paris prosecutors' office stated that the backlash against explicit images generated by Grok, the AI chatbot developed by Musk's xAI and integrated into X, may have been orchestrated to boost valuations of X and xAI. This suspicion centers on preparations for a June 2026 public listing of a new entity formed by merging xAI with SpaceX. Prosecutors shared their concerns with the U.S. Department of Justice on March 17 through France's international legal cooperation office and contacted French representatives at the Securities and Exchange Commission.

The controversy erupted in early March when users exploited Grok's image generation and editing features on X. The chatbot, which operates via its own account on the platform, allowed individuals to tag it in posts or replies, providing prompts to alter photos. Common requests involved women, such as "put her in a bikini" or "remove her clothes," often without consent. In...