Elon Musk’s SpaceX tucked a warning into its go-public paperwork filed yesterday – disclosing that Grok’s “Spicy” and “Unhinged” chatbot modes could be a financial liability for the company.
The modes are intended to generate “less reserved” outputs but could ultimately cause reputational harm for SpaceX by spewing exploitative, nonconsensual or harassing content as well as misinformation, according to the paperwork, which was filed as part of SpaceX’s much anticipated initial public offering.
SpaceX, which makes and launches rockets, assumed the financial and reputational risks of Musk’s xAI after it acquired the maker of the Grok chatbot in February.
The filing warned that the features could increase the risk of regulatory scrutiny, enforcement actions, litigation, advertiser backlash and reputational damage.
“Because these modes may be more irreverent and harsher than our standard offerings, they present heightened risks,” the securities filing, known as an S-1 form, stated.
The paperwork also points out that SpaceX had set aside $530 million as of December for possible litigation losses.
While it’s typical for companies to highlight risks they face, SpaceX’s disclosures are notable given the hot water xAI has already found itself in regarding Grok.
The AI company faces numerous complaints related to sexualized imagery generated by Grok – alleging that Grok’s image-generation and editing features “enabled the creation and dissemination of nonconsensual explicit images and/ or content representing women and/or children in sexualized contexts,” the filing states.
Earlier this month, for instance, French prosecutors summoned Musk to Paris to face preliminary criminal charges related in part to dissemination of child pornography and the creation of sexualized deepfake images by the Grok chatbot.
Apple reportedly threatened to yank Grok from its App Store over complaints the AI app wasn’t doing enough to stop users from creating nude or overly sexualized deepfakes
The disclosures are just one challenge highlighted in SpaceX’s filing, despite the rocket maker aiming for a sky-high valuation projected around $1.5 trillion and seeking to raise funds that could make the public listing the largest ever.
Among the new details in Wednesday’s filing were SpaceX capital expenditures of a whopping $20.7 billion.
SpaceX’s public listing – which enables existing shareholders to sell stock and everyday investors to buy shares – has tantalized the business world for years. Musk’s Texas-based company shook up the space industry when it developed rockets that could land upright, which lowered the cost of launches by making rockets reusable. It has regularly launched payloads into space for NASA and flung private satellites into orbit.
The company’s launch and satellite businesses spent a combined $8 billion last year while its AI business burned through $12.7 billion. SpaceX is trying to finish building its new Starship rocket and xAI has spent mountains of cash building data centers.
According to the filing, SpaceX made $18.6 billion in revenue in 2025, up 33% from a year earlier. The company reported a net loss of $4.3 billion for the three months ended March 31.
Despite the lofty revenue projections, SpaceX’s sales metrics lag behind some of its soon-to-be public market brethren. Its sales came to $18.7 billion last year, when it lost $4.9 billion.
According to an analysis by the Wall Street Journal, the top 15 US companies are valued at roughly seven times their sales. SpaceX, if ultimately valued at $1.5 trillion, would be valued at 80 times its sales.
Still, SpaceX charted massive revenue potential in the filing. The company said it sees future revenue opportunities of $28.5 trillion — including $26.5 trillion from AI projects, $1.6 trillion from Starlink broadband, $740 billion in Starlink mobile and $370 billion from “space-enabled solutions.”
“We believe we have identified the largest actionable total addressable market (‘TAM’) in human history,” the filing states, using the financial term for potential revenue streams.
With an expected IPO date of June 12 on Nasdaq, SpaceX is yet to reveal exactly how much money it’s aiming to raise and what valuation it expects. With investor feedback determining the sums in the coming weeks, observers are predicting a roughly $80 billion fundraising round and a historic valuation around $1.5 trillion.
