CentOS7 latest kernel moved from “kernel.ko” to “kernel.ko.xz”

I updated the kernel from 3.10.0-514.26.2.el7.x86_64 to 3.10.0-693.11.6.el7.x86_64
I noticed all the kernel modules in 3.10.0-693.11.6.el7.x86_64 are now appended with ".xz" (sample output below)

/usr/lib/modules/3.10.0-693.11.6.el7.x86_64/kernel/sound/soc/intel/skylake/snd-soc-skl-ipc.ko.xz
/usr/lib/modules/3.10.0-693.11.6.el7.x86_64/kernel/sound/soc/intel/skylake/snd-soc-skl.ko.xz
/usr/lib/modules/3.10.0-693.11.6.el7.x86_64/kernel/sound/soc/snd-soc-core.ko.xz
/usr/lib/modules/3.10.0-693.11.6.el7.x86_64/kernel/sound/soundcore.ko.xz
/usr/lib/modules/3.10.0-693.11.6.el7.x86_64/kernel/sound/synth/emux/snd-emux-synth.ko.xz
/usr/lib/modules/3.10.0-693.11.6.el7.x86_64/kernel/sound/synth/snd-util-mem.ko.xz
/usr/lib/modules/3.10.0-693.11.6.el7.x86_64/kernel/sound/usb/6fire/snd-usb-6fire.ko.xz
/usr/lib/modules/3.10.0-693.11.6.el7.x86_64/kernel/sound/usb/bcd2000/snd-bcd2000.ko.xz
/usr/lib/modules/3.10.0-693.11.6.el7.x86_64/kernel/sound/usb/caiaq/snd-usb-caiaq.ko.xz
/usr/lib/modules/3.10.0-693.11.6.el7.x86_64/kernel/sound/usb/hiface/snd-usb-hiface.ko.xz

But just the previous version, everything was still just standard *.ko

/usr/lib/modules/3.10.0-229.7.2.el7.x86_64/kernel/sound/synth/emux/snd-emux-synth.ko
/usr/lib/modules/3.10.0-229.7.2.el7.x86_64/kernel/sound/synth/snd-util-mem.ko
/usr/lib/modules/3.10.0-229.7.2.el7.x86_64/kernel/sound/usb/6fire/snd-usb-6fire.ko
/usr/lib/modules/3.10.0-229.7.2.el7.x86_64/kernel/sound/usb/caiaq/snd-usb-caiaq.ko
/usr/lib/modules/3.10.0-229.7.2.el7.x86_64/kernel/sound/usb/misc/snd-ua101.ko
/usr/lib/modules/3.10.0-229.7.2.el7.x86_64/kernel/sound/usb/snd-usb-audio.ko
/usr/lib/modules/3.10.0-229.7.2.el7.x86_64/kernel/sound/usb/snd-usbmidi-lib.ko
/usr/lib/modules/3.10.0-229.7.2.el7.x86_64/kernel/sound/usb/usx2y/snd-usb-us122l.ko
/usr/lib/modules/3.10.0-229.7.2.el7.x86_64/kernel/sound/usb/usx2y/snd-usb-usx2y.ko

When I actually try to decompress the ko.xz, it looks like they are misnamed and not actually compressed

tar -xJf ip_gre.ko.xz
tar: This does not look like a tar archive
tar: Skipping to next header
tar: Exiting with failure status due to previous errors

xz -l shows the file as "compressed"

 xz -l ip_gre_default.ko.xz
Strms  Blocks   Compressed Uncompressed  Ratio  Check   Filename
    1       1      8,924 B     32.2 KiB  0.271  CRC64   ip_gre_default.ko.xz

Does this mean modprobe will automatically handle compressed ko's?

It looks more like a build problem than anything else.