A group of former OpenAI employees has launched a new AI watchdog organization with a pointed message for Wall Street: before you buy shares in a SpaceX IPO, take a closer look at what’s happening inside xAI.

The core argument is straightforward. Elon Musk’s constellation of companies, spanning xAI, SpaceX, Tesla, and X (formerly Twitter), are increasingly intertwined. And if xAI’s safety practices are as haphazard as these former researchers claim, the fallout could ripple across the entire Musk empire, including whichever entity is next to court public market investors.

The safety allegations

The ex-OpenAI staffers who co-founded the watchdog group have described xAI’s safety culture in terms that don’t leave much room for interpretation. Words like “reckless” and “completely irresponsible” have been used to characterize the company’s approach to evaluating its Grok AI models.

Their specific concerns center on opaque evaluation processes and a lack of proper documentation. There are also allegations that Grok models were trained using data from X users without their consent. And that important safety assessments were either rushed or skipped entirely in favor of getting products out the door faster.

In 2024, a coalition of current and former OpenAI employees issued an open letter highlighting serious risks tied to advanced AI systems and criticized the companies for weak transparency obligations. Former OpenAI employees have also been pushing for stronger protections for AI safety researchers who speak out.

Why this matters for SpaceX going public

When a company goes public, institutional investors and underwriters conduct extensive due diligence. If xAI faces regulatory scrutiny, data privacy lawsuits, or a major safety incident, the reputational and financial contagion could reach SpaceX. The watchdog group’s argument is that investors deserve more information about xAI’s safety practices before committing capital to any Musk-affiliated IPO.

The crypto angle investors shouldn’t ignore

Musk’s public statements and business decisions have historically moved markets in ways that extend far beyond his own companies. Dogecoin’s price has swung dramatically on Musk tweets and business announcements over the years.

Allegations that xAI used X user data without consent echo the kinds of privacy concerns that have dogged Web3 projects. If regulators use xAI as a case study for tightening data governance rules, decentralized data marketplaces and privacy-focused protocols could see both increased scrutiny and increased demand, depending on how the regulatory framework shakes out.

If those whistleblower protection efforts gain legislative traction, they could establish precedents that apply beyond AI to any technology company handling sensitive user data or deploying systems with significant societal impact, including crypto exchanges, DeFi protocols, and anyone building AI-powered trading infrastructure.