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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.

Elon Musk’s xAI Set to Raise $5 Billion Debt Despite Tepid Investor Interest

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Elon Musk’s AI startup, xAI, is poised to close a $5 billion debt financing led by Morgan Stanley, although investor demand has been notably modest, according to sources familiar with the matter. The debt package includes a floating-rate term loan, a fixed-rate loan, and secured bonds, with allocations scheduled for Wednesday.

The floating-rate loan carries an interest rate of 700 basis points above the Secured Overnight Financing Rate, while the fixed-rate loan and secured notes offer yields near 12%, significantly higher than the current 7.6% average yield for high-yield bonds. This elevated cost reflects the risks investors associate with xAI’s unrated debt and lack of profitability to date.

Several potential investors declined to participate, citing concerns over xAI’s financial transparency and Musk’s previous financing history. Notably, Musk’s 2022 $44 billion acquisition of Twitter involved $13 billion in loans that lenders had to retain on their balance sheets for two years due to poor secondary market demand.

While the debt issuance was fully subscribed, total orders amounted to roughly 1.5 times the amount offered, below the typical 2.5 to 3 times seen in similar junk bond offerings. Unlike Musk’s Twitter debt deal—where banks guaranteed the sale and committed capital—this transaction is structured as a “best efforts” deal with no such guarantees from Morgan Stanley.

Beyond debt, xAI is also reportedly pursuing a $20 billion equity raise that could value the company above $120 billion, with some investors estimating up to $200 billion.

Oracle to Offer Elon Musk’s Grok 3 AI Model to Enterprise Customers

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Oracle announced on Tuesday that it will integrate Grok 3, the latest large language model developed by Elon Musk’s xAI, into its cloud infrastructure portfolio for corporate clients, expanding its AI offerings alongside models from Meta, Mistral, and Cohere.

Grok 3, which debuted in February 2025, was previously available to premium subscribers on Musk’s X platform and to developers through xAI. Now, Oracle Cloud Infrastructure (OCI) will host the model in its data centers, allowing business users to run Grok 3 with full enterprise-grade security and data residency protections.

“Our goal here is to make sure we can provide a portfolio of models — we don’t have our own,” said Karan Batta, Oracle’s Senior VP of Cloud Infrastructure. “That’s the current strategy. We are going to be the one that offers all of them.”

This collaboration aligns with Oracle’s strategy of being a multi-model platform, enabling clients to integrate a variety of AI systems into their enterprise workflows without compromising on data sovereignty or compliance requirements.

What It Means for the Market

  • Grok 3, which competes with models from OpenAI and DeepSeek, will now be accessible to companies who prefer Oracle’s security and compliance environment.

  • Oracle’s move reflects rising demand from businesses seeking access to cutting-edge AI models without having to rely on public-facing APIs that may expose sensitive data.

This announcement follows broader trends of cloud providers forming strategic partnerships with AI startups to diversify their AI ecosystems, especially as businesses become more discerning about how and where their data is processed.