Elon Musk’s artificial intelligence startup xAI quietly abandoned its “public benefit corporation” status, which it held upon its founding. Emerging documents show that the company relinquished this status as of May 9, 2024. xAI did not revert to its former status when it later merged with X. The company has not responded to any questions about the matter.
xAI terminates public benefit corporation status
This decision, which came amid Musk’s legal battle with OpenAI, sparked allegations that xAI was using its PBC status solely to project a positive image. This secret status change was so sudden that even the company’s lawyers were unaware of it. In a lawsuit, they still designated xAI as a PBC as late as May 2025.
Following the status change, xAI began powering its Tennessee data center with natural gas turbines, sparking outrage. After the company’s energy supplier, Solaris Energy Infrastructure, failed to fulfill its emissions control promises, allegations emerged that xAI’s operations increased air pollution in the region, leading to a civil lawsuit against the company.
Meanwhile, xAI’s Grok 4 model, launched on July 9th, made no disclosures regarding safety tests or content restrictions. Competitors like OpenAI, Google DeepMind, and Anthropic continue to share safety reports as they release their new models, but debates about security and transparency in the AI industry persist.
An interesting detail is that xAI was incorporated in Nevada. Experts say this state is not preferred by companies seeking genuine accountability. Nevada law provides broad legal protections for executives but does not impose a rigorous reporting obligation. It is known that xAI has not yet published the expected environmental and social reports.
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