Context:
The Data (Use and Access) Act 2025 (DUAA) seeks to promote innovation and economic growth whilst protecting individuals and their rights [1]. To address concerns over explicit AI image generation, the government brought a new provision through the DUAA s 138 [2]. Taking effect on 6 Feb 2026, it delivers two key changes:
- It is illegal for AI image generating services to facilitate the creation of nonconsensual intimate images of an adult.
- Courts are empowered to issue deprivation orders over nonconsensual imagery [3].
Grok, Elon Musk’s xAI chatbot, is the focus, and similar concerns surrounding his AI are reflected in Europe, Brazil, Hong Kong, Canada, and the United States [4].
The new provisions are necessary as Grok has been used to generate intimate images of women and children. However, whilst the regulation is asserted as protecting women and girls and not restricting freedom of speech [5], it will inevitably carry commercial implications.
Commercial Implications:
This section will assess three potential commercial implications arising from the new set of provisions. Specifically, accidental liability due to statutory ambiguity, the heightened burden of consent and content moderation, and finally, the reputational impact on Musk.
First, s 138(2) ambiguously defines a ‘purported intimate image’ as appearing ‘to show the person in an intimate state’ [6], lending itself to accidental liability risk. AI image generation is becoming commonplace in major productions [7]; this, whilst not inherently bad, must be accurately regulated. Accordingly, the ambiguity of the legislation could result in large-scale claims as ‘intimate state’ is undefined. This instability will lead to investor uncertainty and potentially disrupt industry profits. To tackle this, intense moderation and consent confirmation must occur.
Second, the heightened scrutiny of AI generated imagery delivers increased moderation demands, both in proving consent and monitoring content outputs. As consistent with the criminal law, the legislation requires consent, or at least a reasonable belief of consent. This increases the initial legal burden for production companies, forcing solicitors to stringently face the drafting burden. Then, once the content is ready for release, platforms must moderate outputs, which, in light of the legislative ambiguity, is an unclear task. Thus, content will be tightly monitored at both ends of production, increasing the burden for many media creators, from individuals to media hosting services.
Third, the focus on Grok and xAI could cause reputational damage to Musk, potentially disrupting investors. As articulated by Liz Kendall, xAI holds this technology behind a paywall, ‘effectively monetising this horrific crime’ [8]. Therefore, governmental scrutiny of Musk and his business-strategy is apparent. Interestingly, in response to this, Tesla is pivoting from new models and investing $2bn in xAI [9]. Therefore, despite reputational risk, technological ambition takes priority over scrutiny, and the new law does not warrant investor retreat.
Conclusion:
Ultimately, whilst necessary, the legislation is inherently ambiguous and will increase the production burden at both ends of content creation. Moreover, it is likely to increase accidental criminal risk. Finally, despite reputational scrutiny, Musk’s xAI attracts further investment.
Footnotes:
[1] Information Commissioner’s Office, The Data Use and Access Act 2025: What does it mean for organisations? (ICO) https://ico.org.uk/about-the-ico/what-we-do/legislation-we-cover/data-use-and-access-act-2025/the-data-use-and-access-act-2025-what-does-it-mean-for-organisations/ accessed 29 January 2026.
[2] Data (Use and Access) Act 2025, s 138.
[3] Jennifer Baker, ‘Pressure on Grok Mounts After UK Speeds Up Sexual Deepfake Ban’ (IAPP, 2025) https://iapp.org/news/a/pressure-on-grok-mounts-after-uk-speeds-up-sexual-deepfake-ban accessed 29 January 2026.
[4] Ibid.
[5] ‘X could lose right to self-regulate, says Starmer’ (BBC News, 14 January 2026) https://www.bbc.co.uk/news/articles/cq845glnvl1o accessed 29 January 2026.
[6] (n 2).
[7] Vasilis Tsiavos and Fotis Kitsios, ‘The Digital Transformation of the Film Industry: How Artificial Intelligence Is Changing the Seventh Art’ (2025) 49(8) Telecommunications Policy 103021 https://www.sciencedirect.com/science/article/pii/S0308596125001181/ accessed 29 January 2026.
[8] Rt Hon Liz Kendall MP, Intimate Grok AI Deepfakes (Letter to Dame Chi Onwurah MP, Chair of the Science, Innovation and Technology Committee, 12 January 2026) https://committees.parliament.uk/publications/51067/documents/283193/default/ accessed 29 January 2026.
[9] Kana Inagaki and Stephen Morris, ‘Tesla scraps models in pivot to AI as annual revenue falls for first time’ Financial Times (29 January 2026) https://www.ft.com/content/78d53ce6-a731-496c-8d8b-e53bc35f49a8 accessed 29 January 2026.
Bibliography:
Legislation
Data (Use and Access) Act 2025.
Official and Government Publications
Information Commissioner’s Office, The Data Use and Access Act 2025: What Does It Mean for Organisations? (ICO) https://ico.org.uk/about-the-ico/what-we-do/legislation-we-cover/data-use-and-access-act-2025/the-data-use-and-access-act-2025-what-does-it-mean-for-organisations accessed 29 January 2026.
Kendall L, Intimate Grok AI Deepfakes (Letter to Dame Chi Onwurah MP, Chair of the Science, Innovation and Technology Committee, 12 January 2026) https://committees.parliament.uk/publications/51067/documents/283193/default accessed 29 January 2026.
News and Media
Baker J, ‘Pressure on Grok Mounts After UK Speeds Up Sexual Deepfake Ban’ (IAPP, 2025) https://iapp.org/news/a/pressure-on-grok-mounts-after-uk-speeds-up-sexual-deepfake-ban accessed 29 January 2026.
‘X Could Lose Right to Self-Regulate, Says Starmer’ (BBC News, 14 January 2026) https://www.bbc.co.uk/news/articles/cq845glnvl1o accessed 29 January 2026.
Inagaki K and Morris S, ‘Tesla Scraps Models in Pivot to AI as Annual Revenue Falls for First Time’ Financial Times (29 January 2026) https://www.ft.com/content/78d53ce6-a731-496c-8d8b-e53bc35f49a8 accessed 29 January 2026.
Journal Articles
Tsiavos V and Kitsios F, ‘The Digital Transformation of the Film Industry: How Artificial Intelligence Is Changing the Seventh Art’ (2025) 49(8) Telecommunications Policy 103021 https://www.sciencedirect.com/science/article/pii/S0308596125001181 accessed 29 January 2026.
