With its promoting enterprise nonetheless down on earlier ranges, and its viewers slowly filtering away to different apps, how will Elon Musk’s X proceed to earn a living, and stay a viable proposition transferring ahead?
That’s been the important thing query since Musk bought the app as his personal social media interest horse. Within the months since, X/Twitter has suffered main losses from its core advert income, in response to Musk’s controversial modifications and private stances.
Certainly, X’s promoting income, which pre-Elon made up 90% of its $5 billion annual consumption, has declined by round 60%. And whereas Elon has additionally drastically reduce workers, and lowered prices wherever he can, there stays a query as to how X will have the ability to rebuild its profitability, and get again heading in the right direction, as its utilization continues to slip.
And likewise, now that Musk has turned on Trump, and alienated himself from no less than some portion of Trump’s viewers.
So how will X earn a living transferring ahead?
The reply, at this stage, appears to be AI, with Musk transferring to align all of his X funding behind his xAI push.
Elon has lengthy held an curiosity in AI improvement, and was one of many preliminary buyers in OpenAI, again when the corporate was a non-profit, looking for one of the best methods to maximise AI’s advantages for humanity. However Musk was ousted from the group, after he sought to take over as its CEO. Then OpenAI launched ChatGPT, and began making a living from its methods, and Elon has held a grudge ever since, as a result of it took tens of millions in preliminary donations from him and has transformed that right into a enterprise from which he good points no profit.
So, in some methods, Musk launched his personal xAI challenge out of spite. However now, amid the broader AI hype, it’s emerged because the central ingredient of his re-imagined X enterprise empire.
So can X realign its income consumption round AI, in an effort to scale back its reliance on advert {dollars}?
Effectively, there’s definitely one thing there. In response to new knowledge from AppFigures, the launch of xAI’s Grok 4 mannequin, which additionally contains extra superior entry to paying subscribers, noticed X’s apps usher in a heap extra money after the discharge.
As reported by TechCrunch:
“Elon Musk’s xAI launched Grok 4 late on July 9, and by Friday, July 11, Grok’s gross income on iOS had jumped a whopping 325% to $419,000, up from $99,000 the day earlier than the Grok 4 launch.”
xAI’s consumption was largely centered on the separate Grok app, however with xAI additionally buying X the app, any revenue for X’s AI initiatives can also be now shared with X the platform in a roundabout way.
One other ingredient that additionally drove extra curiosity was the launch of X’s AI companions, together with its “anime goth lady” character, which customers can interact in NSFW chats with.
AppFigures knowledge reveals that Grok’s iOS downloads elevated by 40% the day after the launch of its AI companions, with income additionally rising.
So possibly, if X can maximize curiosity in its AI choices, that may provide a viable different to advert income, although ongoing issues about X’s AI mannequin workings (the preliminary Grok 4 mannequin integrated Elon’s private opinions into its solutions), in addition to potential psychological well being points associated to AI companions, might impede this considerably.
I imply, these issues aren’t slowing X’s improvement, which is now additionally focusing on children with its Grok AI bot choices. However it does appear to be xAI is veering into probably harmful territory, whereas the clear bias being constructed into the bot’s solutions additionally seems to be set to impede take-up in some circles.
However possibly, xAI is turning into large enough to safe sufficient funding and capital to maintain each xAI and X working. That’ll be troublesome in the long run, as a result of xAI might want to proceed investing in its AI improvement to maintain up with the competitors, however proper now no less than, it does appear to be novel functions are driving curiosity, in addition to X’s extra superior reasoning fashions.
On this sense, the cult of Elon performs a key function in selling xAI’s instruments as being cutting-edge, probably groundbreaking AI fashions, primarily based on Elon’s direct involvement. Many nonetheless see Musk as a tech savant, who can see issues that others can not, and which will even be serving to to generate extra curiosity in his AI initiatives.
However it stays a dangerous guess, and one which’s prone to be outdated by bigger, extra well-funded AI initiatives,
But, on the identical time, X’s enterprise prospects have been wanting up this yr.
In response to Emarketer, X’s international promoting income is projected to rise by 16.5% to $2.26 billion in 2025, as extra manufacturers come again to the platform, both primarily based on the outcomes of the U.S. election or stress from X itself.
Possibly, together, that would imply that X is in a stronger monetary place than anticipated, with the billions invested into xAI additionally now obtainable to be re-shared to the platform.
And it’s doable that X’s AI initiatives could possibly be sufficient to prop up its prospects, although it stays to be seen whether or not that preliminary curiosity in its AI instruments will maintain, and hold producing new revenue for the mixed firm.
