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 adjustments 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 lower employees, 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 in addition, now that Musk has turned on Trump, and alienated himself from a minimum of 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 growth, and was one of many preliminary buyers in OpenAI, again when the corporate was a non-profit, looking for the very 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 earning money from its techniques, and Elon has held a grudge ever since, as a result of it took hundreds of thousands in preliminary donations from him and has transformed that right into a enterprise from which he beneficial properties 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 component of his re-imagined X enterprise empire.
So can X realign its income consumption round AI, with a view to cut back its reliance on advert {dollars}?
Effectively, there’s actually one thing there. In accordance with new knowledge from AppFigures, the launch of xAI’s Grok 4 mannequin, which additionally consists of extra superior entry to paying subscribers, noticed X’s apps herald 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 earnings for X’s AI initiatives can be now shared with X the platform in a roundabout way.
One other component that additionally drove extra curiosity was the launch of X’s AI companions, together with its “anime goth woman” character, which customers can interact in NSFW chats with.
AppFigures knowledge exhibits 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 various to advert income, although ongoing issues about X’s AI mannequin workings (the preliminary Grok 4 mannequin included 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 growth, 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 appears to be like 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 tough in the long term, as a result of xAI might want to proceed investing in its AI growth to maintain up with the competitors, however proper now a minimum of, it does appear to be novel purposes 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, based mostly 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 wager, and one which’s more likely to be outdated by bigger, extra well-funded AI initiatives,
But, on the similar time, X’s enterprise prospects have been trying up this 12 months.
In accordance with Emarketer, X’s world promoting income is projected to rise by 16.5% to $2.26 billion in 2025, as extra manufacturers come again to the platform, both based mostly on the outcomes of the U.S. election or strain from X itself.
Possibly, together, that might 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 potential that X’s AI initiatives may very well 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 preserve producing new earnings for the mixed firm.
