Elon Musk's X Under EU Scrutiny Following $33 Billion xAI Deal

Elon Musk's recent $33 billion deal to move social media platform X under the control of his artificial intelligence company xAI is drawing serious attention from European Union regulators.

According to Bloomberg, the European Commission has sent new questions to X, looking into how the ownership structure has changed since the March deal.

EU officials are concerned that the new arrangement could impact how much the company should be fined under the Digital Services Act (DSA).

According to Reuters, the DSA, which focuses on online safety and transparency, gives the EU power to fine companies up to 6% of their global revenue if they break the rules.

Regulators want to know if combining xAI with X, now valued together at over $100 billion, affects that fine amount.

Thomas Regnier, a spokesperson for the European Commission, confirmed Thursday that the request for information was made. "We are following closely changes in the corporate structure of X, as we would changes in any other designated platform," he said.

X has not yet responded to the latest round of questions, nor has Musk's AI company, xAI.

EU May Count Musk's Other Companies in X Fine Decision

Back in December 2023, the EU opened an investigation into X over suspected rule-breaking.

One major concern was the paid blue checkmark system, which had once meant verified identities but now simply shows who paid for it. Regulators said this change was misleading and could confuse users.

To address those concerns, X recently added a disclaimer to its checkmark feature, saying it no longer guarantees a user's identity.

But the EU says the issue may still warrant penalties, and a decision could be made before the summer break in August—though that timeline could be delayed.

There's also a larger question at play: should revenue from Musk's other companies—like SpaceX, Neuralink, and the Boring Company—count when calculating a possible fine for X?

That's something EU officials are said to be considering, as the lines between Musk's ventures continue to blur, Blooberg said.

X may try to resolve the issue by promising changes that would fix the EU's concerns. But if not, the fine could be substantial, depending on the final decision about how much the combined companies are worth.

As of now, neither xAI nor X has made a public statement on the investigation.

Originally published on vcpost.com