Ofcom has welcomed restrictions on Grok, X's AI chatbot, to prevent the generation of sexualised images.
The regulator said its investigation was "ongoing" to "get answers into what went wrong and what's being done to fix it".
It came as the prime minister said in a social media post that X must act to comply with UK laws "immediately".
The company has announced the Grok AI tool on X will no longer be able to undress pictures of real people.
Sir Keir said: "Free speech is not the freedom to violate consent. Young women's images are not public property, and their safety is not up for debate.
"I welcome that X is now acting to ensure full compliance with UK law - it must happen immediately.
"If we need to strengthen existing laws further, we are prepared to do that."
There has been mounting condemnation in the UK and US of the chatbot's image editing capabilities, with UK government ministers threatening action against the platform.
A days-long outcry over reports Grok was allowing users to manipulate images of children to sexualise them led to Ofcom launching an investigation into X on Monday.
What Ofcom has said
While Ofcom welcomed reports of the new restrictions, it said its investigation would continue as it seeks "answers into what went wrong and what's being done to fix it".
"We have implemented technological measures to prevent the Grok account from allowing the editing of images of real people in revealing clothing such as bikinis," the company said in a statement on Wednesday.
"This restriction applies to all users, including paid subscribers.
"We now geoblock the ability of all users to generate images of real people in bikinis, underwear and similar attire via the Grok account and in Grok in X in those jurisdictions where it's illegal," it added.
Sir Keir condemned Grok as "disgusting" and "shameful" earlier on Wednesday, saying the government would not "back down" if X did not act.
Following reports the company had imposed new restrictions on Grok, a Number 10 source said: "This is a vindication for Keir Starmer, who has shown he will always stand up for the people of this country - including the vulnerable - against the most powerful."
An Ofcom spokesperson said: "X has said it's implemented measures to prevent the Grok account from being used to create intimate images of people.
"This is a welcome development. However, our formal investigation remains ongoing. We are working round the clock to progress this and get answers into what went wrong and what's being done to fix it."
Read more from Sky News:
X to block Grok AI from undressing images of real people
Economy records 0.3% growth in November
Mr Musk had previously claimed Grok would refuse to produce illegal content and appeared to blame "adversarial hacking" for the chatbot's generation of sexualised images.
Geoblocking prevents access to a feature for people based in particular countries, but the change still leaves open the possibility that it could be circumvented with a VPN.
The restriction will apply to all users, including paid subscribers, while image editing and creation will be limited to premium users.
Speaking at Prime Minister's Questions on Wednesday, Sir Keir had suggested action by the company may be imminent, telling MPs: "I have been informed this morning that X is acting to ensure full compliance with UK law.
"If so, that is welcome, but we're not going to back down, and they must act."
The controversy had seen X, which was bought by Mr Musk in 2022 when it was called Twitter, threatened with a potential fine or even ban in the UK.
Mr Musk, the billionaire owner of Tesla and SpaceX, who has previously called for Sir Keir to be voted out of office, has claimed - along with Reform UK leader Nigel Farage - that a ban would be an attack on free speech.
X had already announced in an earlier response to the political pressure that image creation and editing would be restricted to paid subscribers.
Response to announcement
Following X's announcement that it would prevent the Grok account from being used to create intimate images of people, Technology Secretary Liz Kendall said: "I welcome this move from X, though I will expect the facts to be fully and robustly established by Ofcom's ongoing investigation.
"Our Online Safety Act is, and always has been, about keeping people safe on social media - especially children - and it has given us the tools to hold X to account in recent days.
"I also want to thank those who have spoken out against this abuse, above all the victims. I shall not rest until all social media platforms meet their legal duties and provide a service that is safe and age-appropriate to all users.
"We will continue to stand up for British values and to uphold the laws of this land."
Ofcom's powers fall under the Online Safety Act, which states online platforms must make sure they're not hosting illegal content.
If X is found to not comply with the Online Safety Act, Ofcom can issue a fine of up to 10% of its global revenue - or £18m - and if that is not sufficient, it can get a court approval to block the site.
(c) Sky News 2026: Ofcom welcomes Grok sexualised image restrictions and says investigation 'ongoing'

I'm ashamed of Sir Keir Starmer, says rebel MP - as row over justice reforms escalates
Water company probed after tens of thousands of homes lose supply
South East Water supply crisis is familiar tale for customers
Murder probe launched after 68-year-old woman stabbed to death at Hampshire village home
Economy records 0.3% growth in November
Counterterrorism police battle ferry gunmen in major training exercise
Sadiq Khan: AI could usher in new era of mass unemployment
The hidden parking fine loopholes every driver should know about | Money newsletter



