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Elon Musk plans to introduce ads to X’s AI-based chatbot answers and power business with social media platform AI after the departure of CEO Linda Yaccarino.
In a live discussion with advertisers airing on X on Wednesday, the billionaire entrepreneur said he would allow marketers to pay to appear in the platform’s chatbot Grok proposal. Grok was developed by Musk’s AI startup Xai and acquired X in March for $45 billion.
“So far, our focus has been on making Grok the smartest and most accurate AI in the world. I think we’ve managed to do that. So we’re paying attention to the ways we pay for these expensive GPUs.”
“If a user is trying to solve a problem (by asking GROK), it would be ideal to promote a specific solution at that point,” he added. Without sharing details about your monetization strategy.
In a rare and engaging attack with marketers, Musk outlined plans to further automate the brand’s advertising process and use Xai’s technology to improve ad targeting. Before the merger, X’s ad technology team was troubled by the difficulty of displaying ads to intended audiences, according to insiders.
Several ad executives have told the Finance Times that they want AI companies to sell ad slots through chatbots, but groups such as Openai, the maker of ChatGPT, have openly denied plans to do so amid fears of consumer backlash.
In the meantime, brands and advertising agencies have been experimenting with ways to promote their products organically in chatbot search results. For example, by posting content that is likely to be featured by the model.
Musk’s announcement is as some advertisers continue to avoid X more than moderation issues. Last month, Glock repeatedly praised Adolf Hitler, sparking controversy for sharing anti-Semitic rhetoric, raising concerns that Musk is deploying AI technology without the right guardrail.
Recently, X has diversified revenues to premium subscriptions beyond advertising, boosted by Grok’s introduction as a payment feature. However, Musk has been desperately raising funds to keep pace with rivals like Meta, Openai and Google in expensive AI races.
In an email sent to several advertisers before Wednesday’s discussion, and seen by the Financial Times, X boasted that the company has undergone a “complete transformation” in terms of business and safety efforts over the past two years.
In particular, he said that improved ad auctions have resulted in “significantly reduced costs” for companies bidding for slots. He also said it improved the relevance of ads using Xai and retraining models, which are measured when ad clicks become sales.
The amount of conversions that have increased 40% due to web ads since June when users purchase products that are seen in ads, was noted in an email, but the average cost of advertising has dropped by 7% “at all brand targets.”
The overture to advertisers reestablished Musk as the face of X after Jaccarino left in July.
A veteran of Madison Avenue, Jaccarino often served as an intermediary between a marketer and a mask. Marketers and Musks previously denounced marketers for pulling out spending from the platform.
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He appeared on the phone measured on Wednesday. He held with several other Xai and X executives. Musk said his goal is to “overcome the Twitter curse” as a place where users “have come in for 10 years and have never bought one thing because the advertising system hasn’t actually shown the participants what they want.”
Among other changes, he said his Grok technology will assess and prioritize how glaring aesthetically pleasing ads are. The company also plans to build a checkout feature for users to purchase from advertising while they remain in the app.
Some advertisers gave masks a sparkling review of the X upgrade during the call, while others refused to participate, claiming that the platform’s content was still too toxic. A media buyer at the top holding company told Financial Times:
