The European Union is under fire following revelations that companies owned by billionaire Elon Musk, including SpaceX and xAI, received €270 million in contracts and grants since 2017, raising questions about transparency and favoritism in procurement processes. The controversy, reported on May 12, 2025, has sparked debates about the EU’s reliance on Musk’s enterprises amid concerns over his political influence and business practices.
The payments, detailed in an internal EU audit, include €200 million to SpaceX for satellite launches and space technology development, and €70 million to xAI for AI research under the Horizon Europe program. SpaceX’s contracts primarily supported the Galileo navigation system and Copernicus Earth observation program, leveraging the company’s reusable Falcon 9 rockets, which offered cost savings over European alternatives like Ariane 6.
xAI’s funding focused on advancing AI for climate modeling and cybersecurity, aligning with the EU’s digital transformation goals. The audit, prompted by complaints from European competitors, found no direct irregularities but highlighted a lack of competitive bidding in some awards, particularly for SpaceX’s 2022–2024 launch contracts.
Critics, including members of the European Parliament, argue that the EU’s dependence on Musk’s firms undermines its strategic autonomy, especially in space, where Europe aims to rival U.S. dominance. The controversy is amplified by Musk’s vocal support for right-wing political movements and his ownership of X, which has faced EU scrutiny for failing to curb disinformation, risking fines under the 2022 Digital Services Act. French and German aerospace firms, such as Airbus and Thales, have called for prioritizing European providers, citing job creation and technological sovereignty. In 2024, Europe’s space industry employed 150,000 workers, compared to SpaceX’s 12,000 globally.
The EU defends the contracts, noting that SpaceX’s reliability—completing 96 launches in 2024—and xAI’s cutting-edge AI capabilities justified the awards. Officials stress that all payments complied with EU procurement rules, though they’ve pledged to review bidding processes to address transparency concerns. The issue has strained EU-U.S. tech relations, with Musk’s firms also securing $3 billion in NASA contracts in 2024, intensifying perceptions of market dominance. As the EU navigates its digital and space ambitions, the controversy underscores the challenge of balancing innovation with equitable competition.