Elon Musk’s AI company xAI has filed a lawsuit against the South Carolina man and accused him misusing its AI chatbot Grok to make child sexual abuse material (CSAM) and explicit deepfake images. The lawsuit, filed in a federal court in Texas, among one of the first known cases in which an AI company has taken legal action against one of its own users over the alleged creation of illegal AI-generated content.
The defendant, Terry Harwood, was arrested in South Carolina in February on charges related to the sexual exploitation of minors. As per xAI’s complaint, Harwood violated the company’s terms of service by attempting to use Grok to create sexually explicit images involving both minors and adults.
The company alleged that Harwood uploaded ordinary photos of adults and children into Grok and attempted to generate explicit AI-manipulated images based on them. xAI also claims he created non-consensual sexual content featuring adults through the platform.
In its filing, xAI said that the alleged actions not only caused serious harm to victims but also exposed the company to legal and reputational risks. The company is seeking financial damages, although it has not specified an amount, along with a permanent court order preventing Harwood from accessing Grok in the future.
The lawsuit comes at a time when xAI has faced growing criticism over Grok’s safeguards against AI generated content. The company has previously been accused of allowing users to create non-consensual sexual deepfakes using the chatbot.
As a part of filing, xAI also showcased that it actively removes users who violate its policies and reports suspected child sexual abuse material to the National Center for Missing & Exploited Children (NCMEC). As per the company, it has suspended more than 52,000 accounts and submitted over 73,000 reports to NCMEC in 2026, actions that it says have contributed to at least 244 arrests.