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Elon Musk-owned X has filed a lawsuit against Media Matters, which caused an advertisers' exodus from the social media site claiming it showed their ads beside anti-semitic content.
Musk had in the immediate wake of the allegations threatened to bring a "thermonuclear" heat on the non-profit by bringing a lawsuit.
The left-leaning group had on Friday published a report claiming that X was showing ads of such firms as Apple, Bravo, Oracle, Xfinity, and IBM alongside anti-semitic content -- a charge that single-handedly caused all of them to suspend promotion of their brands on the site.
Musk called the organisation a "pure evil" in retaliation.
Texas Attorney General Ken Paxton on Monday initiated an inquiry into potential fraudulent activity by Media Matters.
"We are examining the issue closely to ensure that the public has not been deceived by the schemes of radical left-wing organizations who would like nothing more than to limit freedom by reducing participation in the public square," said Paxton.
Sharing the development on X, Musk said that the "fraud" carries both civil and criminal consequences.
Musk has not challenged Media Matters' claims of seeing ads on pro-Nazi content. On the contrary, the suit confirms that the screenshots the organisation posted are real.
Its main contention is that the organisation "manipulated" the service to make X serve the offending ads.
"Media Matters has manipulated the algorithms governing the user experience on X to bypass safeguards and create images of X's largest advertisers' paid posts adjacent to racist, incendiary content, leaving the false impression that these pairings are anything but what they actually are: manufactured, inorganic, and extraordinarily rare," a copy of the lawsuit read.
The alleged manipulation involved creating an account that exclusively followed a combination of major brands and extremist content, then "endlessly scrolling and refreshing its unrepresentative, hand-selected feed until it saw a confluence of the two."
In reply to the events, the Media Matters president Angelo Carusone, told a news website, "We are going to continue our work undeterred. If he sues us, we will win."
"This is a frivolous lawsuit meant to bully X's critics into silence," he said. "Media Matters stands behind its reporting and looks forward to winning in court."
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