Musk’s New Move as X’s Revenue Drops – Ads Coming to Grok

New York – X (formerly Twitter) is preparing to show ads on its AI chatbot, Grok, as part of Elon Musk’s strategy to boost revenue. Since Musk took Twitter private, the platform’s ad earnings have significantly declined. Now, Grok users will see advertisements alongside answers and suggestions to their queries, creating a new income stream for the chatbot.

While XAI (Musk’s AI division) has so far focused on improving Grok’s capabilities, it is now shifting attention toward monetization. In a related move, Musk has also launched Grok Imagine, a new AI-powered image and video generation tool. Currently free in the U.S., the feature is integrated into the Grok app, available for download on the App Store and Google Play.

Why Ads Are Necessary

During a Spaces discussion, Musk explained that ads are crucial to cover the high costs of running Grok, particularly the expensive GPUs required for AI processing. Additionally, X plans to optimize its ad algorithms using XAI’s technology to make ads more targeted and effective on the platform.

Revenue Recovery Expected

According to Reuters, X’s ad sales dropped after Musk’s $44 billion takeover in October 2022. However, projections now suggest a 17.5% increase in ad revenue, potentially raising annual earnings to $1.31 billion. This shift indicates Musk’s push to stabilize X’s finances through AI-driven advertising.

What’s Next for X and Grok?

With Grok now serving ads and new AI features like Grok Imagine rolling out, X is expanding beyond its social media roots. The success of these efforts will determine whether Musk can turn around the platform’s financial struggles while keeping users engaged.