Elon Musk’s artificial intelligence company xAI has filed a lawsuit against Terry Harwood, a South Carolina man arrested earlier this year on charges of sexually exploiting minors. The lawsuit, submitted on Tuesday, July 15th 2026, in a Texas federal court, alleges that Harwood knowingly violated xAI’s terms of service by misusing the company’s AI tool, Grok, to produce sexually explicit deepfake images involving a child.

According to the 12-page complaint, Harwood opened multiple xAI accounts under false identities and designed misleading prompts to bypass Grok’s built-in safeguards. The complaint states, "Despite expressly agreeing to abide by the xAI Terms of Service and Acceptable Use Policy, Defendant designed misleading prompts to circumvent Grok’s built-in safeguards and then abused the tool to convert non-sexual photographs into sexually explicit images without the photograph subjects’ knowledge or consent."

The review of Harwood’s accounts revealed repeated attempts to alter images to sexualize their subjects, which Grok often refused to process due to content moderation rules. xAI enforces its policies by suspending or terminating accounts and reporting suspected child sexual abuse material to the National Center for Missing & Exploited Children.

This legal action highlights ongoing challenges in preventing the misuse of AI technologies for harmful purposes.

Sources