Hello, and welcome to TechScape. I’m your host, Blake Montgomery, US tech editor for the Guardian. Today, we discuss Elon Musk’s rosy depiction of Grok’s image generation controversy; the seven-figure panic among Silicon Valley billionaires over a proposed wealth tax in California, though with one notable exception; and how AI and robotics have revitalized the Consumer Electronics Showcase.
Musk’s reframe
The firestorm over the Grok AI tool has been raging for more than a week now, and it shows no signs of dying down.
Last week, I wrote about the rising backlash against Elon Musk’s Grok AI tool, which in recent weeks has allowed users to generate thousands of sexualized images of women. Some of the images show real women, some are fake, some are nonconsensual, and some depict children, all in “minimal clothing”, as the AI tool itself described them.
X and its parent company, xAI, have taken some measures to curb the flood. The social network shut off its image generation feature for users who do not pay, which constitute the majority of X’s users.
Through the controversy, Musk has stubbornly recast the AI tool’s problems as everything but what they really are. He’s been promoting its popularity as if it were a piece of productivity software. He crows about its download numbers with dubious claims. On 10 January; he celebrated Grok reaching the top spot in New Zealand’s version of Apple’s App Store. (Rankings by the analytics firm SimilarWeb of the most-downloaded apps in New Zealand, which were updated the same day as Musk’s tweet, put Grok in 14th place.) The same day, he reposted a tweet about Grok reaching the No 1 spot in Thailand’s Apple App Store. (SimilarWeb’s rankings do not show Grok in the top 50 most-downloaded apps in the country.) On 9 January, he retweeted a post about Google searches for Grok spiking. (I would guess the increase in searches is evidence of great interest in the AI tool’s scandal more so than interest in using it.)
In response to the UK’s threats to ban the AI tool, he accused the country’s government of stifling free speech. After watchdogs cited instances of Grok undressing minors, he said: “Anyone using Grok to make illegal content will suffer the same consequences as if they upload illegal content,” handing the responsibility to moderate his social network to law enforcement and courts. “Illegal” is in a court’s hands and frees him from moderating all but the most heinous content.
So what’s the strategy?
Perhaps to Musk, all press is good press? He may be right: his AI tool seems likely to accrue more users and few penalties as a result of the flood of nearly naked images.
Grok has faced some repercussions: the UK’s communications regulator, Ofcom, has launched an investigation into xAI and Grok, and possible punishments could include a total ban. The Internet Watch Foundation, also based in the UK, announced it had found instances of child sexual abuse material generated by Grok in Dark Web forums. X’s revenue in the UK has plummeted by 60% as concerns over content moderation and brand safety grow. Both Indonesia and Malaysia have limited access to the AI tool in response.
But missing from the chorus declaring Grok are the two de facto smartphone regulators of smartphone software, Apple and Google, operators of the world’s biggest mobile app stores. Neither has indicated whether the Grok’s output violates their app stores’ terms of service. In the US, there’s been little backlash from regulators and lawmakers.
The lesson for Musk and other tech leaders seems apparent: the fewer restrictions you place on AI, the more shocking content you allow it to generate, the greater your engagement and your profit.
Tech billionaires panic over a proposed wealth tax in California
Tech’s billionaires are plotting against a proposed tax on their fortunes that may appear on ballots across California in November.
Venture capitalist and antichrist evangelist Peter Thiel has already made a $3m donation to fight the proposal, according to campaign finance disclosures filed with the state. Other billionaires have started an encrypted group chat on Signal to strategize against it, which includes Anduril founder Palmer Luckey, Trump’s AI and crypto “czar” David Sacks, according to the Wall Street Journal. It’s called “Save California”. My colleague Dara Kerr reports on the division among billionaires:
Under a tax proposal that could be put to voters this November, any California resident worth more than $1bn would have to pay a one-off, 5% tax on their assets to help cover education, food assistance and healthcare programs in the state.
Several Silicon Valley figures have already threatened to leave California and take their business elsewhere. But Jensen Huang, the CEO of Nvidia, whose net worth is nearly $159bn, told Bloomberg Television this week that he is “perfectly fine with it”.
This puts Huang in stark contrast with the Google co-founders Larry Page and Sergey Brin, Palantir co-founder Peter Thiel and Donald Trump’s AI and crypto czar, the venture capitalist David Sacks, all of whom have recently indicated they are leaving California for tax-friendlier states including Florida and Texas.
Under the proposed tax, Huang would pay roughly $7bn, and Page and Brin would pay one-time amounts of about $13bn and $12bn, respectively, based on their current net worth of $264bn and $243bn. Thiel would pay $1.3bn, based on his current net worth of $26bn.
AI reinvigorates CES, tech’s biggest gadget showcase
The Consumer Electronics Show, held annually in Las Vegas for decades since its start in 1967, made global news this year. Nvidia and AMD chose it as the forum for major announcements on new hardware and software. Samsung announced a double folding phone, the Galaxy Z Fold 3, and Lego debuted a “smart brick” that seems quite fun as well. Robots abounded, rechristened as “physical AI”.
It’s been quite the turnaround for CES. For much of the 2010s, hardware announcements rarely made for top headlines. New DVD players or TVs did not make a splash. Smartphones dominated, and they all looked extremely similar. Apple, the most valuable company in the world at the end of the decade, even skipped it entirely. Now, however, Nvidia is the most valuable company in the world, and it chose CES to present what’s next. Artificial intelligence and robotics have breathed new life into CES. The themes and innovations that define the convention are broader and affect more industries outside tech than they once did.
Two weeks ago, I predicted that consumer technology would take many strange new shapes in the coming year, which seems to already be true as we view new developments in robotics. Humanoid robots debuted at CES, including one from Hyundai and Boston Dynamics. My colleague Samuel Gibbs dubbed a laundry-folding robot one of the best things about the convention.
Read more: Robots that can do laundry and more, plus unrolling laptops: the standout tech from CES 2026
