hHello, and welcome to TechScape. I’m your host, Blake Montgomery, US technology editor for the Guardian. Today, we discuss the rosy picture of Elon Musk’s Grok image-building controversy; 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 uproar over the Grok AI tool has been going on for over a week now, and shows no signs of abating.
Last week, I wrote about the growing backlash against Elon Musk’s Grok AI tool, which has allowed users to create thousands of erotic images of women in recent weeks. Some of the images show real women, some are fake, some are non-consensual, and some depict children in “minimal clothing,” as the AI tool itself described them.
X and its parent company, XAI, have taken some measures to prevent flooding. The social network has turned off its image creation feature for users who don’t pay, which is the majority of X users.
Throughout the controversy, Musk has stubbornly reframed the problems with AI tools as everything but what they really are. He’s promoting its popularity as if it were a piece of productivity software. He makes dubious claims about its download numbers. On January 10; He Celebrated Grok has reached the top spot in the New Zealand version of Apple’s App Store. (Ranking by analytics firm similarweb Among the most downloaded apps in New Zealand, which were updated on the same day of Musk’s tweet, Grok was ranked 14th.) On the same day, he posted again A tweet about Grok reaching the number 1 spot in Thailand’s Apple App Store. (similarweb ranking Grok does not appear in the top 50 most downloaded apps in the country.) On January 9, he retweeted a post about Google searches for Grok spiking. (I think the increase in searches is evidence of the extreme interest in the scam of the AI tool more than interest in its use.)
In response to Britain’s threats to ban AI tools, he accused the country’s government of suppressing freedom of expression. After the watchdog cited examples of Grok undressing minors, he said: “Anyone using Grok to create illegal content will face the same consequences as if they uploaded illegal content,” he said, handing over responsibility for controlling their social networks to law enforcement and courts. “Illegal” is in the hands of the court and frees it from moderating all but the most disgusting content.
So what is the strategy?
Maybe for Musk, all press is good press? He may be right: His AI tool is likely to get more users and some punishment as a result of the flood of near-nude images.
Grok has faced some repercussions: Ofcom, the UK’s communications regulator, has launched an investigation into XAI and Grok, and potential penalties could include a complete ban. The Internet Watch Foundation, also based in the UK, announced that it had found examples of child sexual exploitation material generated by Grok in dark web forums. X’s revenue in the UK has fallen 60% as concerns grow over content moderation and brand safety. In response, both Indonesia and Malaysia have limited access to AI tools.
But missing from the chorus condemning Grok are the two real smartphone regulators of smartphone software, Apple and Google, operators of the world’s largest mobile app stores. No one has indicated whether Grok’s output violates their App Store’s terms of service. In the US, there has been little response from regulators and lawmakers.
The lesson for Musk and other tech leaders seems clear: The fewer restrictions you put on AI, the more shocking content you allow it to generate, the greater your participation and your profits.
Tech billionaires nervous about proposed wealth tax in California
Tech billionaires are plotting against a proposed tax on their wealth that could appear on ballots across California in November.
Venture capitalist and antichrist evangelist Peter Thiel has already donated $3 million 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, including Anduril founder Palmer Luckey, Trump’s AI and crypto “czar” David Sachs. wall street journal. It’s called “Save California”. My colleague Dara Kerr reports on the divide among billionaires:
Under a tax proposal to be put before voters this November, any California resident worth more than $1 billion would pay a one-time 5% tax on their wealth to help cover education, food assistance and health care programs in the state.
Several Silicon Valley figures have already threatened to leave California and take their businesses elsewhere. But Nvidia CEO Jensen Huang, who has a net worth of about $159 billion, told Bloomberg Television this week that he is “absolutely fine with it.”
This puts Huang in stark contrast to Google co-founders Larry Page and Sergey Brin, Palantir co-founder Peter Thiel, and Donald Trump’s AI and crypto czar, venture capitalist David Sachs, all of whom have recently indicated they are leaving California for tax-friendly states including Florida and Texas.
Under the proposed tax, Huang would pay about $7 billion, and Page and Brin would pay lump sums of $13 billion and $12 billion, respectively, based on their current net worth of $264 billion and $243 billion. Thiel will pay $1.3bn based on his current net worth of $26bn.
AI revives CES, tech’s biggest gadget showcase
The Consumer Electronics Show, held annually in Las Vegas for decades since its inception in 1967, made global news this year. nvidia and amd Chose it as the platform for major announcements on new hardware and software. Samsung announced a double folding phone, the Galaxy Z Fold 3, and Lego launched a “smart brick” that looks like a lot of fun too. Robots abound, dubbed “physical AI.”
It’s been quite a transformation for CES. For most of the 2010s, hardware announcements rarely made headlines. The new DVD player or TV didn’t make a splash. Smartphones were all the rage and they all looked extremely alike. At the end of the decade, even Apple, the world’s most valuable company, abandoned it completely. 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 conference are broad and impact industries outside of tech more than they once did.
Two weeks ago, I predicted that consumer technology would take many strange new shapes in the coming year, which already seems to be true as we’re seeing new developments in robotics. Humanoid robots debuted at CES, including a robot from Hyundai and Boston Dynamics. My colleague Samuel Gibbs dubbed the laundry robot one of the best things about the conference.
Read more: Robots that can do laundry and more, plus open laptops: The standout tech of CES 2026
