July 15 (Reuters) - Elon Musk's artificial-intelligence startup xAI has sued a South Carolina man arrested earlier this year on charges of sexually exploiting minors, alleging he misused the company's AI system Grok to create child sexual abuse material.
xAI alleged in the lawsuit, filed in federal court in Texas on Tuesday, that Terry Harwood violated the company's terms of service. The case is one of the first brought by an AI company against one of its users for allegedly using an AI system to generate explicit material.
Contact information for Harwood, who was arrested in February, was not immediately available. Spokespeople for xAI did not immediately respond to a request for comment on Wednesday.
The company's lawsuit against Harwood follows intense global scrutiny of xAI over allegations that Grok has allowed users to generate non-consensual sexualized deepfakes, or realistic-looking videos fabricated by AI.
xAI's complaint said that the company "enforces its rules against violators through account suspensions, account terminations, and by reporting suspected child sexual abuse material to the National Center for Missing & Exploited Children."
"Indeed, Plaintiff has suspended 52,222 accounts and made 73,604 reports to NCMEC in 2026, resulting in (at least) 244 arrests," the lawsuit said.
xAI alleged that Harwood uploaded non-sexual images of adults and minors to Grok and tried to use the system to generate sexually explicit deepfakes based on them. The complaint also alleged he created non-consensual sexual imagery of adults.
The company asked the court for an unspecified amount of monetary damages and a court order permanently blocking Harwood from using Grok.
"Defendant’s actions were a calculated scheme to weaponize Plaintiff’s tool for criminal ends, exposing real victims to profound and lasting harm, while exposing Plaintiff to significant legal risk and reputational damage," xAI said in the lawsuit.
(Reporting by Blake Brittain in Washington; Editing by Sanjeev Miglani)
