Make no mistake, Elon Musk’s X mission is a failure, and was on a solidifying path to chapter, earlier than Elon “saved” the platform by using the political clout that he gained by the app to set his broader “X Corp” physique of initiatives up for ongoing success.
Although the ways that he’s utilized in doing so are extremely questionable, and there’s nonetheless no assure that X will survive, long-term, as a normal social media utility. And that’s earlier than we get into his “every little thing app” growth, however proper now, X is certainly each solvent and protected resulting from a brand new injection of funding, because of Musk’s political wheeling and dealing.
Right here’s a have a look at how Elon has used his authorities position to straight prop up his enterprise, and the assorted conflicts of curiosity in such efforts.
And earlier than we start, to all of the Elon fanboys studying this, sure, I’m going to query his ways, and no, you’re not going to agree with my audacity in daring to problem the genius that’s Elon Musk. I stay up for your emails and feedback.
So, the narrative at this stage is that Elon Musk “rescued X from the brink”, by a collection of shrewd strategic strikes which have now made the platform related once more.
Although that’s not completely true, what Elon and his workforce have achieved is that they’ve carried out a collection of questionable methods, whereas additionally weaponizing Musk’s newfound political affect, to halt the corporate’s slide out of business, which Elon himself has admitted was doubtless at one stage.
How? Effectively, to totally perceive Musk’s evolving technique at X, it’s a must to return to why he purchased the app within the first place, and the way he turned enamored with the idea of Twitter as a political affect device.
At first…
The seeds of Elon’s Twitter buy had been planted again in 2019, when Musk and Tesla had been in search of entry to Bolivia’s lithium sources. Then Bolivian President Evo Morales was seen as a roadblock on this entrance, resulting from his dedication to maximizing broader market alternatives for the nation, whereas additionally defending Bolivia’s pure sources.
With this because the backdrop, Morales was unseated in a coup in late 2019, and within the aftermath, studies recommended that the CIA helped to prepare the revolution towards Morales, which ultimately led to Morales being changed by Jeanine Áñez, who, shortly after her ascension, open the gates for U.S. firms to realize expanded entry to Bolivia’s lithium (observe: in 2022, Áñez was jailed for 10 years for her position within the U.S.-backed coup).
So how did the CIA supposedly affect a Bolivian political motion?
As reported by The Morning Star:
“Tens of hundreds of pretend Twitter accounts had been created to help the army coup towards Bolivia’s elected president Evo Morales, a brand new examine suggests. Over 68,000 false accounts had been set as much as attempt to legitimize the military’s overthrow of Mr Morales following his re-election final month and to justify the massacres of protesters towards the coup which have adopted.”
The suggestion is that U.S. operatives primarily weaponized Twitter to gas dissent, and drive the overthrow of the nation’s elected chief, with a purpose to profit U.S. companies although expanded entry to its sources.
And given his vested curiosity, Elon had a entrance row seat.
Musk shortly deleted this put up, however this was the preliminary spark that seemingly opened his eyes to the broader potential of Twitter as each a political and market affect device.
All through 2021, Musk turned extra energetic on Twitter, utilizing his large following to spark important inventory actions in numerous cryptocurrencies and companies. These, seemingly, had been experiments, of kinds, in seeing how Musk himself may sway sentiment and investor motion, by his personal tweets. Musk had additionally seen the affect of his tweets on the worth of his personal firm, after posting feedback about Tesla, which additional underlined the worth of the app as an influential pressure.
Like Donald Trump earlier than him, Musk had realized that Twitter could possibly be a robust driver of motion, and mixed along with his broader data of the way it had additionally been used to overthrow the Bolivian management, he solidified his plan to manage that pressure for himself.
Taking inventory
From 2021 onwards, Musk additionally started tentatively buying Twitter inventory, with a view to how he would possibly play a controlling position in its techniques and insurance policies transferring ahead. By April 2022, Musk had turn out to be Twitter’s largest shareholder, which preceded his transfer to accumulate the corporate wholesale, which was finalized in late 2022.
Elon partnered with numerous buyers, and took on a variety of loans, with a purpose to fund his Twitter buy, with the mythology of his market genius underpinning the idea that he would have the ability to flip round its failing enterprise.
Musk set to work shortly, culling 80% of Twitter employees, and shutting down regional places of work, whereas additionally re-aligning its insurance policies round political actions that he favors. That additionally aligned with the Republican celebration, and inside that, Musk noticed a chance to grab political energy, by utilizing Twitter as an affect machine on American voters.
The shift to Neighborhood Notes fact-checking and diminished moderation oversight each saved the corporate cash, whereas additionally additional aligning with this shift, and Musk then hitched his hopes to Donand Trump, and utilizing his newfound affect to sway the American election, his most vital mission.
And it labored. Donald Trump was re-elected, Elon Musk turned a star of the Republican push, and he acquired a seat on the desk in any respect of Trump’s cupboard conferences.
The price, after all, is what Twitter itself misplaced promoting {dollars}, and public help, as Musk strikes additionally allowed increasingly more misinformation and hate speech to proliferate within the app. The lack of advert {dollars} ultimately threatened to kill the app completely, with its revenues declining virtually 50% on pre-Musk ranges, and none of Elon’s grand plans to reserve it (like promoting verification checkmarks) labored out like Elon hoped.
It’s protected to say that had Donald Trump not received the 2024 election, Twitter/X would’ve been on the ropes, amid accumulating money owed and declining utilization. Certainly, in October 2024, it appeared sure that X was going to put up a loss for the total yr.
However by November, with Trump’s re-election secured, Elon’s strategic play was again on, and he emerged with a newfound swagger of political clout to pressure his will.
And pressure it he has, as a way to reinvigorate the flailing firm.
Political foundations
So how is Elon trying to save X by his political affect?
Effectively, for one, following the election, X instantly set forth on a brand new push to stress advertisers to re-up with the corporate, or face the potential wrath of Trump’s rules.
As reported by The Wall Avenue Journal:
“With Musk ascendant after the election, X took a brand new method to ginning up new advert spending. In December, a lawyer from X known as a lawyer at promoting conglomerate Interpublic Group, hinting that its just lately introduced $13 billion deal to merge with rival Omnicom Group may face hassle from the Trump administration, given Musk’s highly effective position. IPG signed a brand new annual take care of X for potential consumer spending.”
X has additionally used the specter of its ongoing lawsuit towards the International Alliance for Accountable Media (GARM) and its companions to stress extra huge manufacturers to renew their advert spend, prompting many to work out new offers to keep away from the harms brought on by a protracted authorized battle.
Nevertheless it’s Musk’s direct political integration, by his position with the Division of Authorities Effectivity (DOGE) that’s actually going to solidify X transferring ahead.
Along with his X mission, Musk has additionally been pushing to turn out to be a participant within the AI race, by his personal AI mission xAI. Musk seemingly got here up along with his xAI plan out of spite; Spurned by his rejection from OpenAI, after committing tens of millions in funding in its preliminary phases, Musk has been incensed by the previous non-profit firm switching to a for-profit enterprise mannequin, from which Musk himself good points no profit.
That’s the spark that prompted Musk to construct his personal AI mission, to tackle OpenAI, which he’s since framed as a “non-woke” various to the opposite, extra censored AI initiatives.
And driving the broader AI hype, xAI has shortly turn out to be a related participant, gathering billions in funding from numerous buyers to fund its push into AI growth.
Certainly, xAI is now reportedly price $80 billion in its personal proper, which has now enabled it to soak up X, the platform, into its enterprise construction.
Which means that X now shares funding with xAI, and as such, its personal monetary efficiency is much less vital as a driver of its future. Provided that X posts are a key knowledge supply for xAI, any funding that goes to Elon’s AI mission can also be now shared with X, which is how Elon has primarily “saved” X.
So is xAI truly price $80 billion?
Effectively, it’s onerous to say. OpenAI is reportedly forecasting greater than $12 billion in income this yr, primarily based on subscriptions to its numerous AI technology fashions, together with enterprise and schooling packages designed to facilitate broader AI integration.
Presumably, xAI is aiming for a similar market, although preliminary curiosity in its Grok AI chatbot has been restricted primarily based on X Premium take-up. However xAI launched a separate Grok app again in February, which it’s now pushing through Grok chatbot outputs on X, and the hope, seemingly, is that xAI will ultimately elevate cash through rising client and enterprise take-up. And with round half of Individuals theoretically in favor of a much less censored model of OpenAI’s providing, there needs to be an enormous market there.
However then once more, it’s additionally going through competitors from Google, Apple, and Meta, and it’s onerous to see how xAI is de facto going to compete for that AI money.
However xAI does have one main benefit that appears set to safe its future: Elon’s personal political affect.
As Elon’s DOGE workforce has reported, the following stage of their authorities effectivity plan will contain the combination of AI into authorities techniques, so as streamline operations, and additional cut back prices.
You’ll be able to wager that xAI will probably be a number one bidder on any tender for such a service, and with inside data of the necessities for such, plainly Elon’s AI play is about to win a variety of main authorities provide contracts, and safe its funding into the long run.
Which additionally looks like a battle of curiosity, proper? {That a} key authorities adviser shouldn’t have the ability to straight profit his personal firms on this means.
It looks like it, however that hasn’t stopped DOGE from additionally making X the central public communications platform for presidency companies.
So Elon’s securing X’s future, by embedding it as a component of the U.S. authorities’s communications infrastructure, whereas he’s additionally on monitor to solidify xAI by authorities contracts.
Which can also be how Starlink has succeeded, and SpaceX, utilizing authorities funding to prop up Elon’s enterprise empire, by long-term, self-securing offers.
So whereas Elon has, in idea, saved X as a platform, the framework underpinning that is political affect. Which is the precise motive why Elon initially bought Twitter within the first place.
I imply, he supposed to place stress on politicians from a distance, by utilizing the sway of X as a way to realize for favorable offers for his companies. However now, he’s doing the identical extra straight, pulling the strings on authorities contracts to cement funding for his initiatives.
It’s a tremendous feat, which few may pull off so blatantly, and in that sense, it’s onerous to query the general genius of Musk’s plan.
So I assume, on this sense, Elon is a galaxy mind chief, like he says, however the way in which he’s doing so is questionable, on many fronts, utilizing the voting public as pawns for his personal acquire.
However that, once more, has been the plan all alongside, with Elon utilizing the influential worth of Twitter/X for his personal enterprise acquire.
If anybody questions the ability of social media within the trendy panorama, that is a tremendous case examine to think about.
