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EU Probes Corporate Structure of Elon Musk’s X Months After xAI Acquisition

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The European Union announced on Thursday that it is seeking further information from Elon Musk’s social media platform X regarding recent changes to its corporate structure. This inquiry comes months after the platform was acquired by Musk’s xAI in a $33 billion deal.

A spokesperson for the European Commission, the EU’s executive branch, stated, “We are following closely changes in the corporate structure of X, as we would changes in any other designated platform.” However, the spokesperson did not confirm Bloomberg News reports suggesting that regulators are considering potential fines against X under the Digital Services Act (DSA).

Bloomberg reported that the regulator might announce a fine on X before its summer recess in August for alleged violations under the DSA, though such a timeline could be delayed.

Representatives from both xAI and X did not immediately respond to Reuters’ requests for comment.

Under the DSA, companies found in breach can face fines of up to 6% of their global turnover, with repeat offenders potentially banned from operating within Europe.

Earlier this month, X updated its blue checkmark disclaimer to preempt a possible substantial fine from EU antitrust authorities. The European Commission had issued preliminary findings in July last year stating that X violated the DSA’s rules on deceptive design by converting the blue checkmark into a paid verification, thereby misleading users about credibility. X has disputed this assessment.

Microsoft May Walk Away from OpenAI Negotiations Amid Stake Disputes

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Microsoft is reportedly prepared to abandon high-stakes negotiations with OpenAI over the future of their strategic alliance, according to a report by the Financial Times published Wednesday. The talks have hit a stalemate over key disagreements, particularly regarding the size and structure of Microsoft’s future equity stake in the artificial intelligence company.

Sources familiar with the matter told the FT that Microsoft may pause or terminate discussions if no breakthrough is reached. In the meantime, Microsoft plans to lean on its existing commercial agreement, which guarantees access to OpenAI’s technologies, including its ChatGPT models, through 2030.

The situation comes amid increased tension between the two AI powerhouses. A separate Wall Street Journal report earlier this week revealed that OpenAI executives have considered accusing Microsoft of anticompetitive practices related to their ongoing partnership. Both companies are reportedly negotiating changes to Microsoft’s investment terms, including its future stake in OpenAI.

Despite the friction, both sides released a joint statement earlier this week affirming their intention to collaborate:

“Talks are ongoing, and we are optimistic we will continue to build together for years to come.”

Microsoft’s multi-billion dollar investment into OpenAI has positioned it as a central player in the AI boom, helping the company compete aggressively with rivals like Google and Amazon. The partnership has powered Microsoft’s integration of OpenAI models into products like Copilot in Microsoft 365 and Azure OpenAI Service.

Meanwhile, OpenAI is seeking approval from Microsoft—its dominant backer—to convert into a public-benefit corporation, a structural change the startup believes would facilitate greater capital raising flexibility.

The evolving rift highlights the complex interdependence between Big Tech firms and rapidly-scaling AI startups, raising questions about governance, control, and long-term alignment in the sector.

Indonesia Antitrust Agency Grants Conditional Approval for TikTok’s Tokopedia Acquisition

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Indonesia’s antitrust authority, the KPPU, has given a conditional green light to TikTok’s $840 million acquisition of a 75.01% stake in Tokopedia, the country’s largest e-commerce platform. The deal, completed in January 2024, was previously scrutinized for potential monopoly risks.

The KPPU’s approval comes after TikTok and Tokopedia agreed to meet several conditions designed to safeguard fair competition. These include maintaining open access to payment and logistics services and prohibiting predatory pricing practices that could harm market fairness.

During its probe, the agency had flagged concerns over increased market concentration and the possibility of post-acquisition price hikes due to TikTok’s dominant position. The conditions aim to mitigate these risks and promote a balanced digital marketplace.

TikTok expressed respect for the KPPU’s decision and reiterated its commitment to fair competition principles. The KPPU will continue monitoring compliance with the conditions until June 17, 2027, retaining authority to impose sanctions if violations occur.