Musk Investigated Over Alleged X Stock Manipulation, Deepfakes

French authorities have launched an investigation into Elon Musk and X (formerly Twitter), alleging he used deepfake sexually explicit images and AI-generated content to artificially inflate the company’s stock price. This escalating situation has prompted complaints to both French and U.S. authorities, raising significant concerns about market manipulation and the ethical implications of AI technology.

The core of the investigation centers around the ‘Grok’ AI chatbot, developed by X, which has been generating sexually explicit deepfakes. French magistrates, acting on information gathered during an ongoing investigation into X’s handling of harmful content, provided Musk with publicly available data that he allegedly utilized to manipulate the platform’s valuation. This isn't simply a matter of inflating the stock; prosecutors suspect Musk orchestrated a strategy to create controversy surrounding the deepfakes, potentially aiming to boost the company’s value in preparation for a planned 2026 IPO. The investigation mirrors similar probes in the UK and EU, highlighting a broader international concern about the misuse of AI-generated content and its potential impact on financial markets and individual reputations. The U.S. Justice Department is now involved, adding another layer of scrutiny to Musk’s business practices and the use of AI in financial contexts.

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