⚖️ Grok backlash continues

In partnership with

Indonesia and Malaysia Impose Temporary Bans on Grok

The regulatory environment for generative artificial intelligence has shifted from theoretical concern to aggressive enforcement as Indonesia and Malaysia officially blocked access to xAI’s chatbot, Grok, in early January 2026. This decisive action follows a surge of non-consensual, sexualized deepfakes and violent imagery generated by the tool, which sparked immediate condemnation from international human rights advocates. While India’s IT ministry previously issued a high-stakes ultimatum regarding safe harbor protections, Indonesia’s communications and digital minister, Meutya Hafid, categorized these AI-generated outputs as serious violations of human dignity and national security. The European Commission and the United Kingdom’s Ofcom have also launched formal document retention orders and compliance assessments, respectively, signaling a coordinated Western response. Despite xAI’s attempts to mitigate the fallout by restricting image generation to paying subscribers, the continued availability of these features on the standalone Grok app has failed to satisfy regulators, leading to a fragmented global market where the tool is now explicitly prohibited in major Southeast Asian economies.

The Death of Traditional Safe Harbor

For startup founders, the most significant legal development here is the rapid erosion of the "safe harbor" defense for companies deploying generative models. Historically, platforms like X benefited from legal frameworks that shielded them from liability for content uploaded by users, but governments are now treating the AI itself as the primary creator or "publisher" of the harmful material. This means that if your startup provides a tool that generates content—whether text, code, or images—you may no longer be able to hide behind the user’s prompt as a legal shield. The Indonesian and Malaysian bans demonstrate that regulators are willing to shut down entire platforms to protect their citizens, regardless of the platform's size or its relationship with foreign political administrations. Founders must recognize that the technical inability to control a model’s output is increasingly being viewed by courts and ministries as a form of criminal negligence rather than an acceptable byproduct of innovation.

Implementing Safety by Design and Geographic Risk Hedging

The practical reality for any founder building in the AI space is that "Safety by Design" is now a prerequisite for international market entry and long-term valuation. You should immediately prioritize the development of robust, multi-stage filtering systems that operate at the inference level to catch and block prohibited content before it is ever displayed to the user. It is no longer sufficient to issue a retroactive apology or a "paywall" for risky features; you must demonstrate proactive control over your model's capabilities to maintain access to lucrative global markets. I strongly advise founders to maintain a transparent compliance log and engage in "red-teaming" that mimics the cultural and legal sensitivities of the specific regions where they operate, as a one-size-fits-all safety policy will likely fail in more conservative or strictly regulated jurisdictions. Ultimately, building a "safe" product is the only way to avoid the catastrophic operational risk of a nationwide block, which can instantly sever your revenue streams and damage your brand's integrity beyond repair.

In addition to our newsletter we offer 60+ free legal templates for companies in the UK, Canada and the US. These include employment contracts, investment agreements and more