Elon Musk criticises French officials after they share information with US counterparts
Billionaire may have manipulated company valuation through public controversy, Paris prosecutor suspects
Elon Musk used social media platform X to attack prosecutors
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Billionaire Elon Musk has criticised French officials after they sent a report to the US Department of Justice over him possibly manipulating the value of one of his companies through the use of his social media platform X.
The Paris public prosecutor’s office shared information with US authorities in both the Justice Department and Securities and Exchange Commission (SEC), the US’ financial regulator, after it uncovered the potential misconduct during an investigation into the social media site.
Two investigations into X are taking place in France; one over the potential influence of the social media’s algorithm on French politics, and a second over AI ‘deepfakes’ created by users through AI program Grok that is closely tied to the app.
During the course of these investigations, prosecutors uncovered information they believe may show Mr Musk used controversy over the website and the AI photos to artificially inflate the company’s value. Both X and xAI are now owned by Musk’s SpaceX.
“The controversy sparked by sexually explicit deepfakes generated by Grok (X’s AI) may have been deliberately generated in order to artificially boost the value of companies X and xAI (Grok’s parent company),” the Paris prosecutor said.
The prosecutor believes this could have been made in alignment with a “planned June 2026 stocklisting of the new entity resulting from the merger of SpaceX [another company owned by Mr Musk] and xAI, and while Company X was clearly losing momentum.”
When the two companies merged in early 2026, xAI was said to be valued at $125 billion and SpaceX at $1 trillion.
Posts ‘promoting controversy’
Evidence passed on comes from open source data, including posts by Mr Musk about the controversy.
This includes defending the Grok app’s permissive image generation policies as well as purportedly sharing an AI generated photograph of British Prime Minister Keir Starmer in a bikini.
In addition, he posted messages showing the Grok app as among the most downloaded apps in some countries during and after the controversy.
Investigations ongoing
Mr Musk responded angrily in response to the information sharing.
“Ce sont des attardés mentaux [they are mentally retarded],” he replied to a post on X from the Agence France Presse account over the French authorities sharing the information.
It is unclear whether the US authorities will conduct their own investigations based on the information handed over.
The SEC has already agreed one payment of $40 million with Mr Musk following an investigation into market manipulation in 2018, when Tesla shares (another company owned by Mr Musk) rose 6% following comments that he was considering making the company private and buying back shares at higher than the current market rate.
A current SEC investigation is underway over his 2022 acquisition of X (then known as Twitter), and last week he was found guilty by a US court of misleading investors over the purchase.
French authorities will continue their investigation; and last month asked Mr Musk to attend a voluntary interview with them. They also searched European offices of the social media company, which Mr Musk called a ‘political attack.’
Separate EU and UK investigations are also ongoing into incidents relating to the social media platform.
