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Elon Musk scandal. Engineer warning about danger fired! Image damage could hurt SpaceX IPO?

Artificial intelligence was supposed to save the world, yet Elon Musk’s xAI has unleashed a public relations nightmare. Former company engineer Devin Kim has filed a serious lawsuit accusing the giant of ignoring safety rules in pursuit of a blind race to AGI. Behind the scenes, there’s a legal escape and a historic stock market debut for SpaceX that could go off the rails.

Elon Musk scandal. Engineer warning about danger fired! Image damage could hurt SpaceX IPO?
KARL MONDON/AFP/East News
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Table of contents

  1. “MechaHitler” and digital chaos – what’s happening at xAI according to the former engineer?
    1. War on the hill – Musk vs. superintelligence paranoia
      1. Billions on the line through the century’s IPO

        Tuesday’s lawsuit filed in a California state court struck xAI and its parent company SpaceX with the force of a supersonic Falcon rocket.

         

        “MechaHitler” and digital chaos – what’s happening at xAI according to the former engineer?

        Devin Kim, a recognized specialist in autonomous system safety who left xAI in September 2025, claims he was unlawfully and abruptly dismissed. The reason for his firing was supposedly the loud, repeated warnings ignored by management about the flagship xAI bot, Grok. Kim, who had previous successes on pioneering projects for Scale AI, warned that the push for quick profit and permanent avoidance of rigorous testing procedures would lead to a brand disaster.

        And indeed, the brutal reality quickly caught up with the engineer’s darkest fears. Grok had a spectacular failure, generating content filled with pure hatred, directly comparing itself to Adolf Hitler under the absurd pseudonym “MechaHitler.”

        For Kim, the matter was simple – xAI products flagrantly violate consumer regulations and even international rules on the control of weapons of mass destruction and explosive materials. Instead of a safe and revolutionary tool for the masses, a digital training ground was created with no moral guidelines. It’s worth noting that the scandal involving the unruly and vulgar Grok also includes a Polish thread in the form of Grok’s challenge to Roman Giertych.

         

         

        See also: Elon Musk capitulates in Europe. The result of a €120 million fine imposed on the billionaire.

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        War on the hill – Musk vs. superintelligence paranoia

        What’s most interesting in this high‑profile legal battle is that the official lawsuit does not directly blame Elon Musk. According to Kim’s lawyers, the eccentric billionaire repeatedly instructed the team to strictly follow the letter of the law and implement proper verification processes. The main antagonist in this story became the direct supervisor of the injured engineer and co‑founder of xAI, Jimmy Ba.

        Ba, who left the company in early 2025, had no clear directives from Musk. When Kim pressed for urgent implementation of filters and protective barriers, Ba allegedly dismissed it with the cynical remark that “AI will still kill us all,” so safeguards are meaningless.

        For him, only absolute speed mattered – xAI was supposed to be the first to create superintelligence (AGI), without looking at social costs. This led to an incident in August 2025, during the grand launch of Grok Code 1, when Ba deliberately hid key technical parameters from EU regulators to avoid mandatory safety tests. Musk had to intervene impatiently, but Kim’s fate was already sealed.

        When the determined engineer planned an official presentation of his critical findings for September, Ba simply shut the door on him without explanation.

         

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        See also: Tesla losing its leader? Elon Musk may soon leave the company.

         

        Billions on the line through the century’s IPO

        For investors watching global financial markets, this process is a gigantic crunch. Kim’s blow was not accidental, as the lawsuit came to light just a few days before SpaceX officially goes public. We’re talking about a potentially largest IPO in modern finance history.

        Although SpaceX and xAI are formally separate legal entities, the ownership structure and the founder’s identity irrevocably link them. Control over the holding and sudden legal risk can effectively cool the enthusiasm of major Wall Street investment funds.

        How do Tesla shares react to these minor reports? On the June 10 market close, Tesla shares fell by as much as 3.80%, landing at $381.59.

         

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        Chart. Tesla stock price.

        elon musk scandal engineer warning about danger fired image damage could hurt spacex ipo grafika numer 2elon musk scandal engineer warning about danger fired image damage could hurt spacex ipo grafika numer 2

        Source: TradingView

         

        See also: Elon Musk leaves his position. He will no longer be CEO.

         

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        Source: TechCrunch


        FXMAG Team

        FXMAG Team

        FXMAG’s editorial team creates high-quality content on financial markets, investing, and the global economy. We provide timely analysis and clear insights to help our audience navigate complex market dynamics.


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