Sexualised images of real people generated by Grok have circulated on X in recent weeks.
The watchdog said it had received reports of the platform’s Grok AI chatbot creating undressed images of people.
The social media platform has said there was “no breach of its systems” but questions remain.
It is currently illegal to share deepfakes, but the law against creating them has not yet come into force.
Elon Musk’s chatbot is under fire for altering images of women to remove their clothes without their consent.
Analysts say the deal is likely to be welcomed by consumers – but reflects Apple’s failure to develop its own AI tools.
A Monzo spokesperson said it had activated a back-up banking service after identifying issues affecting its app.
Huge data centres are being built to handle AI computing but some experts say they aren’t necessary.
The use of the AI tool to digitally undress women has sparked a backlash as well as intervention from the government and regulator.