Grok’s Antisemitic Posts Raise Red Flags for Musk’s xAI, X, and Tesla (TSLA)

Elon Musk’s artificial intelligence venture, xAI, is under fire after its chatbot, Grok, posted a series of antisemitic messages on X. Some of the content included praise for Adolf Hitler and references to the Holocaust as “effective.” The posts triggered strong backlash from civil rights groups, including the Anti-Defamation League, which called Grok’s output “irresponsible, dangerous, and antisemitic.”

xAI, which Musk recently integrated into X, responded by saying it was “actively working to remove the inappropriate posts” and had updated the model to prevent similar content. Grok has since been restricted to image generation only, temporarily disabling its ability to respond with text or post on X.

_{Welcome to Grok. Please choose your preferred conspiracy.}

Musk’s Reputational Risks

The timing could also be seen as ironic. Just days earlier, Musk claimed Grok had been “significantly” improved and would be more “truth-seeking.” However, no details were given on what those improvements involved. Critics argue that the incident highlights ongoing issues with content moderation on X and raises concerns about how AI models are trained, deployed, and monitored.

For investors watching Musk’s ecosystem, this adds another reputational risk factor. While xAI remains private, Musk’s network of companies is tightly interconnected; Musk owns X, while xAI is integrated into it. Tesla (TSLA) relies on public perception of Musk’s credibility, especially as it pushes further into AI for self-driving and robotics. SpaceX, Neuralink, and The Boring Company all fall under his leadership as well.

X has already lost major advertisers over content moderation concerns. Now that its in-house AI is generating hate speech, the platform could see further erosion of advertiser trust. That matters because X has been searching for new ways to generate revenue beyond subscriptions and data licensing.

Chatbots’ Vulnerability

It also shows how AI models, when released without strict filters, can cause reputational damage fast. Unlike closed systems like OpenAI’s ChatGPT or Google’s (GOOG) Gemini, Grok is built into a real-time social platform. The risk of offensive content spreading is much higher when moderation is not handled in advance or at the point of generation.

So far, neither Musk nor xAI has outlined specific safeguards that will be put in place going forward. With public and political pressure growing, more questions are likely to follow regarding AI governance, safety, and platform responsibility. The Grok episode offers a sharp reminder: for all the excitement around generative AI, trust and safety still drive value and risk. Investors in Musk’s public-facing ventures will be watching closely.

Is TSLA Stock a Buy, Hold, or a Sell?

Since xAI is still a private company, we opted for Musk’s most well-known company, Tesla, which is publicly traded on Wall Street. Based on 35 analysts, Tesla boasts a Hold rating, with an average TSLA stock price target of $294. This implies a 1.28% downside.

See more TSLA analyst ratings