Yeah, this is probably not the kind of headline that Elon Musk would’ve liked on the same day that he announced a grand merger of his various companies.

Overnight, French police raided the local offices of X, as part of an ongoing investigation into alleged manipulation of the platform’s algorithm, as well as more recent concerns about misuse of its Grok AI chatbot.

French authorities have been pursuing the case over the past year, with investigators seeking insight from the company about alleged foreign interference in relation to its algorithmic amplification of content. The latest Grok controversy has seen the case expand, which has led to this latest action, in which police have searched X’s Paris office.

As per Europol:

“An investigation led by the French authorities is currently underway concerning the online platform X, in relation to the proliferation of illegal content, notably the production of deepfakes, child sexual abuse material, and content contesting crimes against humanity. The investigation is conducted by the Paris Public Prosecutor’s Office with the support of the French Gendarmerie’s cybercrime unit (UNCyber) and Europol.”

Police, Europol says, carried out “investigative measures” within X’s offices in relation to “a range of suspected criminal offences” linked to the functioning and usage of the platform, including the dissemination of illegal content and other forms of online criminal activity. The findings of the case won’t be known for some time, but it could lead to significant penalties for the business, and even criminal charges for X’s ownership.

X has voiced its opposition to the French investigation in the past, claiming that it’s politically motivated, with the ultimate aim of restricting free speech. X owner Elon Musk has reiterated those claims today, amplifying reports of alleged EU censorship, without commenting on the French raid directly.

The action could lead to another big fine for X, which was fined $US140 million by the EU Commission in December for breaches of the platform’s DSA obligations.

When that fine was handed down, Musk hit the same notes, accusing EU regulators of targeting a foreign business, and aiming to censor X, while also calling on U.S. government to push back against the penalty, and for the abolishment of the entire EU framework.

Which is where this could become a much bigger issue. Musk’s close ties to the Trump administration give him direct influence over policy, and potentially foreign trade, and if Musk seeks to make this a bigger political issue, that could lead to bigger impacts, and spark geopolitical tensions, stemming from this perceived censorship.

Elon has previously received public support in opposing EU penalties from key U.S. government figures, including Vice President J.D. Vance and Secretary of State Marco Rubio, with the latter labeling the X investigation “an attack on all American tech platforms and the American people by foreign governments.”

So while there’s been no official response from X as yet, this could become a much bigger issue, leading to destabilization of U.S./EU relations, based on Musk’s framing of the case.

It’s not difficult to see it getting to that level, especially as Musk looks to build his business empire ahead of an expected IPO of SpaceX, which now owns X, later this year.

In this respect, X remains a key liability within the broader X Corp stable of businesses, though also a critical one, in terms of data intake for xAI. Really, X, the platform, is probably not worth the problems that it could cause for SpaceX as a larger business concern, especially as Elon continues to push the limits of what people are allowed to post in the app. But as a symbol of “free speech,” Elon views it as a central element of his broader aims, aside from the data gathering feeder for his AI projects.

But it could become problematic, as Musk looks to promote the larger SpaceX/xAI business.

In terms of revenue, X is likely to be the smallest contributor here, but it will always be the biggest source of contention and concern among investors.

As such, it likely would have been better for Musk to keep the companies separate. But he also needs more funding, and merging them enables broader application of any SpaceX money, as it’s all tied into the same thing.

But it could end up being a bad move for the future of his space exploration dreams, and a major point of contention for regulators.