Musk and inflated valuations: Paris investigates, condemnation in the US
French authorities suspect that Musk inflated the value of X and xAI with a view to the future IPO, exploiting controversy over Grok. In the US, a jury ruled that Musk deceived Twitter investors in 2022 to reduce the price
The nonchalance with which Elon Musk tries to influence, through public statements or artfully mounted cases, the valuations of his companies is the subject of attention by judicial authorities on both sides of the Atlantic. According to the French newspaper Le Monde, the cyber section of the Paris Public Prosecutor's Office has sent two reports - one to the SEC and one to the US Department of Justice - because it believes that Musk may have used the controversy generated by Grok's deepfakes and the ensuing media attention to artificially increase the valuation of X, formerly Twitter, and its parent company xAI. All this in view of the IPO, scheduled for June 2026, of the new entity resulting from the merger between SpaceX and xAI. Today, in fact, SpaceX controls xAI, and xAI controls X.
The Prosecutor's Office, which according to Afp has confirmed, allegedly examined provocative posts by Musk in which he celebrated Grok's image-generating capabilities, coinciding with a sharp increase in downloads of the app. An element that may have contributed to the companies perception of value. The report to the US stems from a broader investigation conducted by the J3 cybercrime section of the Paris Public Prosecutor's Office, headed by Johanna Brousse. The 38-year-old magistrate is known for investigating prominent figures: in August 2024, one of her investigations against Pavel Durov, founder and CEO of Telegram, led to his arrest at Paris airport.
The investigation, opened in 2025, had already implicated Musk and the management of X under different profiles: sexual deepfakes generated by the Ai Grok, including with minors or real people without consent, illicit management of the platform and algorithmic manipulation of political and sensitive content. Prosecutors had already conducted searches in X's French offices, summoned Musk and former CEO Linda Yaccarino for voluntary hearings and heard employees as witnesses. Musk, if he shows up, is scheduled to be heard on 20 April.
After the merger with xAI, SpaceX is targeting a $1.750 billion valuation for its future IPO, according to Reuters, aiming to raise around $50 billion, surpassing Saudi Aramco's record $1.700 billion debut in 2019. Last year, SpaceX reported revenues of 15-16 billion, with a profit of around 8 billion thanks mainly to Starlink, while xAI is valued at 250 billion despite revenues of only 210 million and cash burn of 9.5 billion in the first nine months of 2025.
If the accusations of inflating the valuation coming from Paris are all to be proven, in the United States there is no longer any talk of hypotheses. In this case, a jury verdict has arrived, but it relates to another key moment in Elon Musk's entrepreneurial and financial growth: the acquisition of Twitter, prodromal to what we have seen so far.
