A newly formed AI watchdog group, founded by former OpenAI employees, is warning Wall Street that safety lapses at Elon Musk's xAI could threaten a potential SpaceX IPO. They argue the financial and reputational risks of xAI's practices could ripple across Musk's empire.
The group describes xAI's safety culture as 'reckless,' citing opaque evaluations, lack of documentation, and the use of X user data to train Grok models without consent. They allege safety checks were rushed to accelerate product launches.
For investors eyeing a SpaceX IPO, the concern is direct: institutional due diligence could reveal regulatory or legal exposure linked to xAI. Past statements by Musk have also historically moved crypto markets like Dogecoin. The watchdog warns that data privacy lawsuits or new regulations targeting xAI could create a contagion effect, impacting investor confidence across all Musk-affiliated entities.