Bloomberg reported that European Union regulators have increased their scrutiny of Elon Musk’s artificial-intelligence venture, xAI. This includes its purchase of the social networking platform X (formerly Twitter), valued at 33 billion dollars.
The European Commission is preparing to evaluate potential penalties for X in the Digital Services Act, a rulebook that covers online content.
xAI-X is a new acquisition
Musk announced the acquisition in March 2025. It involved a stock-only transaction, where xAI bought X and effectively brought it under its control.
Musk stated that the combined value of xAI and X is $80 billion, or $45 billion, including 12 billion dollars in debt.
According to the billionaire, this agreement streamlines all of his businesses, and it “solidifies” the relationship between xAI and Twitter, who uses information collected from Twitter in order to improve its Grok chatbot.
Musk also emphasized “xAI” and “X’s Futures,” with the goal to “unlock enormous potential by combining xAI’s advanced AI capabilities and expertise with X’s massive reach.”
Bloomberg reported, citing a reliable source, that the newly combined company, XAI Holdings was worth over $100 billion, excluding any debt.
xAI reportedly invests $1 billion a month in cash-heavy AI projects.
EU Regulations and Potential Penalties
After the acquisition of X, the European Commission intensified their examination of the corporate structure.
The report reveals that sources in the report indicate the Commission has recently conducted new investigations into X.
The regulators are concerned that the size of any fine could be affected by the company structure.
The Digital Services Act ties penalties directly to the global revenues of a business, which means that financial size and the organizational structure of integrated entities can influence the final monetary sanctions.
Sources claim that the Brussels regulator may impose the DSA’s first fine for X before the summer break in August.
While the size of any potential levy is not disclosed and may change at any time, X has the right to respond to the EU grievances in order to avoid a possible penalty.
Thomas Regnier (a spokesperson for the Commission) confirmed on Thursday that it “follows closely” changes to the corporate structure at X as well as any changes made in other platforms.
He confirmed to me that a letter of request for more information was sent by X.
DSA gives the European Commission authority to fine companies up to 6 percent of their annual revenue worldwide for failing to combat illegal content, fight disinformation or adhere to transparency rules.
X’s ongoing compliance investigation and efforts to comply with the law
X has recently tried to explain the function of its blue-checkmark program in a public statement. This was an attempt to calm EU fears.
The Commission was deeply concerned about this program. Its changes, under Musk’s ownership, had been criticized by regulators in the past for misleading users and for not being aligned with industry practice.
The notice aimed at demonstrating that the disruptive behavior had ceased.
The European Union is committed to enforcing digital rules on the major platforms online, particularly as ownership changes and integration of businesses are significant.
X also plans to let users conduct trading and investment activities on the app.
As new information becomes available, this post Elon Musk’s xAI purchase of X triggers a new EU regulatory review may be updated.
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