Ofcom probes X after Grok AI tool generates fraudulent executive deepfakes

The immediate pressure on X highlights the growing regulatory risk for streaming and social platforms that integrate generative AI without aggressive content safety guardrails. As ‘industrial-scale’ deepfakes move from celebrity parody to sophisticated financial fraud, infrastructure providers face a concrete liability shift from content hosting to content generation. This case serves as a test for the enforcement powers of the UK's Online Safety Act against non-domestic tech giants. Watch for Ofcom’s final policy statement on categorised service duties due by mid-2027, which will formalize platform accountability for AI-generated fraudulent ads.

The Ofcom investigation into X reflects a broader global crackdown on AI-generated misinformation. Per the Financial Times in January 2026, the European Commission launched its own formal inquiry into X under the Digital Services Act (DSA). That probe focuses on whether the integration of the Grok chatbot into the social platform facilitated the creation of non-consensual deepfakes and illegal content. In response to mounting pressure, X spokeswoman reported that the company implemented measures in early 2026 to prevent Grok from editing images of real people in revealing attire, though regulators indicated these steps were insufficient to halt ongoing investigations.

The rise of deepfake fraud has reached critical levels for the financial sector. Per The Guardian in February 2026, research from the AI Incident Database suggests that ‘impersonation for profit’ now accounts for the largest proportion of reported AI safety incidents. Global financial losses to AI-driven scams are projected to hit $40 billion by 2027, according to reporting from Infineentech in March 2026. This surge is prompting banks to abandon traditional identity verification in favor of multi-modal biometric and behavioral defenses.

Regulators are racing to close legislative gaps that frequently exempt standalone chatbots from safety mandates. Per CMS Law in February 2026, Ofcom clarified that while it has jurisdiction over X's social media platform, it cannot currently regulate the standalone Grok service because the Online Safety Act (OSA) only applies to services with user-to-user or search elements. To address this, the UK government is independently evaluating new regulations for generative AI models to ensure that technology notices for detecting illegal content can cover the underlying AI engines regardless of their hosting environment.