Sweden’s state default pension fund AP7 is publicly criticizing Elon Musk and the space company SpaceX, and the case offers a revealing look at how governance and content-moderation failures are now weighed as financial risks. A lack of procedures to stop illegal content on the X platform is one of the main reasons for its stance, the fund’s asset management manager Lena Fahlen told news agency TT.
This summer’s IPO of SpaceX became the largest in history by market capitalization, making the company the world’s seventh most valuable listed firm. Attention and speculation around the stock were extensive, in part because of Musk’s role as founder, and the question of whether to invest loomed large ahead of the listing.
In connection with its half-year report, AP7 revealed its decision: a clear no, following a sustainability analysis conducted before the listing. Fahlen cited two reasons, shortcomings in corporate governance and, above all, the absence of a credible way to manage risks linked to human rights.
A central concern involved the artificial-intelligence tool Grok, which the fund said had been used to produce illegal content, including material sexualizing children. According to Fahlen, the company has neither denied this nor demonstrated measures to prevent it from recurring. Asked whether the assessment would differ without Grok, she noted that similar incidents had appeared on X as well, tying the problem to AI operations connected to the group and to a broader lack of processes for managing such risks.
Governance concerns compounded the decision. Musk serves as both chief executive and chairman of the board, leaving what the fund described as limited influence for minority shareholders, a structure that made AP7 skeptical that engagement or dialogue would succeed. Where some investors try to change a company from the inside, AP7 concluded that route was effectively closed.
The fund’s approach is not unprecedented. AP7 has previously acted on Musk’s other major company, Tesla, though Fahlen stressed that was for different reasons, namely violations of union rights. Taken together, the two cases suggest a pension manager increasingly willing to sit out even the market’s most hyped listings when it judges that the underlying governance and rights risks cannot be managed.
