The European Commission is investigating the transaction in which Elon Musk's artificial intelligence (AI) company xAI acquired the social media platform X (formerly Twitter), Bloomberg News reported on the 19th. This is interpreted as a measure to assess the impact of corporate structure changes due to the acquisition on potential penalty surcharges, separate from the existing Digital Services Act (DSA) violation investigation.
Musk previously stated that he sold X, which he acquired in 2022, to xAI for $33 billion in March. This transaction values xAI at $80 billion and is understood to effectively place X under xAI's umbrella. The EU believes that this structural change may affect the criteria for calculating fines under the DSA.
The European Commission is also separately investigating whether X has violated the DSA concerning content management. The DSA stipulates that penalties can be imposed of up to 6% of annual global revenue for failures to address illegal content or misinformation, or for non-compliance with transparency standards.
Beginning in December 2023, the EU is examining whether X has properly implemented measures to prevent the spread of misinformation and information manipulation, and there is speculation that a penalty surcharge could be announced before the August holiday period depending on the investigation results. However, the scale of the penalty has not yet been determined, and if X expresses its intention to address the EU's concerns, sanctions may be reduced or postponed.