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 pastime 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 reduce workers, and decreased prices wherever he can, there stays a query as to how X will be capable of 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 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 growth, and was one of many preliminary buyers in OpenAI, again when the corporate was a non-profit, in search of 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 getting cash 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 features no profit.
So, in some methods, Musk launched his personal xAI undertaking 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, with the intention to scale back its reliance on advert {dollars}?
Effectively, there’s actually one thing there. In response to new information 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 more cash 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 targeted on the separate Grok app, however with xAI additionally buying X the app, any revenue for X’s AI tasks can also be now shared with X the platform ultimately.
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 have interaction in NSFW chats with.
AppFigures information exhibits that Grok’s iOS downloads elevated by 40% the day after the launch of its AI companions, with income additionally rising.
So perhaps, if X can maximize curiosity in its AI choices, that may supply a viable different 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 youngsters with its Grok AI bot choices. Nevertheless it does look like xAI is veering into probably harmful territory, whereas the clear bias being constructed into the bot’s solutions additionally appears set to impede take-up in some circles.
However perhaps, 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 run, as a result of xAI might want to proceed investing in its AI growth to maintain up with the competitors, however proper now no less than, it does look like novel functions are driving curiosity, in addition to X’s extra superior reasoning fashions.
On this sense, the cult of Elon performs a key position 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’t, and that will even be serving to to generate extra curiosity in his AI tasks.
Nevertheless it stays a dangerous guess, and one which’s prone to be outmoded by bigger, extra well-funded AI tasks,
But, on the identical time, X’s enterprise prospects have been trying up this yr.
In response to 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 stress from X itself.
Perhaps, 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 attainable that X’s AI tasks might 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 revenue for the mixed firm.
