EU urges Musk to fix Grok quickly
The EU has warned Elon Musk’s X to urgently “fix” the “horrendous” AI tool allowing users to “undress” women and children or face urgent action.
The blunt warning comes as the European Commission extended a retention order sent to Elon Musk’s X last year to retain and preserve all internal documents and data related to xAI chatbot Grok until the end of 2026, amid a global outcry over Grok-generated “undressed” images.
The EU tech commissioner Henna Virkunnen said last night:
“X now has to fix its AI tool in the EU, and they have to do it quickly.
“If not, we will not hesitate to put the DSA to its full use to protect EU citizens”
“X offering the use of Grok to create and share pictures of undressed women and children is horrendous,” she added in a post on X.
Governments and regulators from Europe to Asia are cracking down on sexually explicit content generated by Grok on X, launching probes, imposing bans and demanding safeguards, in a growing global push to curb illegal material.
The British prime minister has warned that X could lose its right to self regulate if Musk’s platform keeps creating sexual images.
Malaysia’s communications regulator said on Tuesday it will take legal action against social media platform X due to concerns over user safety in relation to Grok.
UK minicomputer-maker Raspberry Pi is suffering from the AI industry’s rapacious appetite for memory chips.
Raspberry Pi told shareholders this morning that volatility in the supply and price of memory was clouding its outlook beyond the first half of this year.
It says:
As has been widely reported, the cost of the LPDDR4 DRAM used in many Raspberry Pi products has increased rapidly in recent months, with some major suppliers now indicating limitations of supply at high densities. This trend has largely been driven by memory vendors diverting manufacturing capacity to meet the surge in AI data centre investment.
Raspberry Pi is taking steps to mitigate this problem, including approving new suppliers, developing products that use less memory, and raising its prices.
Shares in the Cambridge-based company have dropped by over 6% this morning, the worst performer on the FTSE 250 index.
From oil to wind power…. and shares of Danish renewables giant Orsted have jumped over 5% this morning, after a US judge gave it clearance to resume work on a project off the coast of Rhode Island.
The ruling by US district judge Royce Lamberth is a legal setback for Trump, who has sought to block expansion of offshore wind in federal waters.
It means Orsted can complete its nearly finished Revolution Wind project, which could begin generating power this year.
In the City, hotel operator Whitbread has jumped to the top of the FTSE 100’s top risers table this morning, after predicting a smaller hit from UK property taxes.
Whitbread told shareholders this morning that it now expects business rate hikes announced in the autumn budget to cost it around £35m in the next financial year.
That’s an improvement on its previous estimate, that the budget would cost it between £40m and £50m.
Whitbread’s shares are up 4% this morning.
Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
“Whitbread, owner of Premier Inn, posited a solid trading update this morning. Its UK revenue per available room (RevPAR) came in better than expected with an increase of 2.5% in Q3 and showing another sequential improvement quarter-on-quarter.
The company’s current trading remains strong, with RevPAR accelerating to 4% in the first six weeks of Q4. This was driven predominantly by London where it grew 7% and Regions up 0.9%, with pricing having the biggest impact in both areas.
Volkswagen sales hit by US tariffs
Automobile manufacturer Volkswagen has reported that its sales in the US fell last year, due to Donald Trump’s tariffs.
In 2025, Volkswagen’s global sales fell by 1.4%, which it blames on “challenging market conditions”.
Volkswagen grew its sales in Europe by 5.1%, and by 18.5% in South America.
But sales fell by 8.2% in the US, with VW warning that “US tariffs also had a marked impact on deliveries in North America”.
Demand also weakened in China, where VW’s sales fell 8.4%.
Martin Sander, Volkswagen board member for sales, marketing and after sales, says:
“The trend in our delivery figures underscores that our products are being well received by our customers and also that we are on the right track with our brand strategy. We expect the market environment to remain challenging overall in 2026.
All the same, I firmly believe that thanks to our refreshed, attractive product portfolio and our clear focus on efficiency and competitiveness we are very well equipped to rise to this challenge. In China alone, we will be bringing out more than ten new electric models this year.”
US crude oil is also climbing this morning.
US West Texas Intermediate crude rose to $60/barrel this morning, for the first time in over a month.
ING commodities strategists said today:
“The price increase comes amid intensifying protests in Iran, raising the possibility of some form of intervention by the U.S.”
Trump: WE’RE SCREWED if we lose supreme court tariff case
Speaking of tariffs…. Donald Trump has also claimed that the US would be “screwed” if the supreme court does not uphold his trade levies.
In a post last night, Trump claimed the US would have to repay “many Hundreds of Billions of Dollars” if the US highest court rules against the White House, plus the “payback” which companies building factories in America to avoid tariffs would – he argues - demand.
Trump wrote:
When these Investments are added, we are talking about Trillions of Dollars! It would be a complete mess, and almost impossible for our Country to pay. Anybody who says that it can be quickly and easily done would be making a false, inaccurate, or totally misunderstood answer to this very large and complex question.
In a dramatic twist, Trump concluded:
Remember, when America shines brightly, the World shines brightly. In other words, if the Supreme Court rules against the United States of America on this National Security bonanza, WE’RE SCREWED!
[Reminder: tariffs are paid by US companies when they import goods]
The Supreme Court could rule as soon as tomorrow on Trump’s tariffs. Last November, they expressed some scepticism of the legal basis of the Trump administration’s sweeping global tariff regime, pointing out that Congress is in charge of taxes.
Introduction: Oil hits two-month high as Trump says countries doing business with Iran face 25% tariff
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Oil has hit its highest level in almost two months this morning, after Donald Trump theatened new tariffs on any country doing business with Iran.
In a post on Truth Social on Monday, the US president declared:
Effective immediately, any Country doing business with the Islamic Republic of Iran will pay a Tariff of 25% on any and all business being done with the United States of America. This Order is final and conclusive. Thank you for your attention to this matter!
Top export destinations for Iranian goods include China, the United Arab Emirates and India, so this could reignite Trump’s smouldering trade war.
The threat came as Iranian auhorities crack down on nationwide protests; as of this morning, at least 648 people have been killed by Iran’s security services and more than 10,600 have been arrested.
Iran is one of the biggest producers of the Organization of the Petroleum Exporting Countries, so any escalation could disrupt oil supply or add a geopolitical risk premium.
Brent crude has climbed to $64.46 a barrel this morning, its highest level since 19 November.
A week ago Brent fell below $60/barrel, when investors were pondering the prospect of increased crude supply from Venezuela.
Analysts at Barclays have calculated that the unrest in Iran has added about $3-4/barrel in geopolitical risk premium in oil prices.
The agenda
10am GMT: Lords Industry and Regulators Committee to examine relationship between regulators and economic growth
1.30pm GMT: US inflation report for December
2.30pm GMT: World Bank updated economic forecasts published - 14.30 embargo, online presser 13.30 - p26 growth forecasts - World economy downgraded from 2.7% forecast growth to 2.4% this year, with US downgraded from 2% to 1.6%
3pm GMT: Richard Hughes, former chair of the UK’s Office for Budget Responsibility, to appears before House of Lords economic affairs committee
