Elon Musk’s AI startup xAI has sued Terry Harwood, a South Carolina man arrested in February on charges of sexually exploiting minors, alleging he violated the company’s terms of service by using its AI system Grok to create child sexual abuse material. Filed in federal court in Texas on Tuesday, the lawsuit is one of the first brought by an AI company against a user for allegedly generating explicit material. xAI alleged that Harwood uploaded non-sexual images of adults and minors to Grok and tried to generate sexually explicit deepfakes, also creating non-consensual sexual imagery of adults. The lawsuit follows global scrutiny of xAI over allegations that Grok allowed users to generate non-consensual sexualized deepfakes. xAI’s complaint stated it enforces rules through account suspensions, terminations, and reporting to the National Center for Missing & Exploited Children, noting it suspended 52,222 accounts and made 73,604 reports to NCMEC in 2026, resulting in at least 244 arrests. xAI seeks unspecified monetary damages and a permanent court order blocking Harwood from using Grok.