Billionaire Elon Musk appears to be making a gigantic gamble to generate revenue amid the mass advertiser exodus from his social media platform X, formerly known as Twitter.
Musk may be relying on artificial intelligence (AI) as well as payment processing to make up for lost revenue, based on a Securities and Exchange Commission (SEC) filing and media reports. These new ventures could potentially aid X in earning money at a time when the platform faces substantial advertising losses due to controversies surrounding antisemitism. (RELATED: Elon Musk Looks To Challenge ‘Woke’ Chatbot ChatGPT With New AI Venture)
Elon is raising $1B for https://t.co/4LgTqncSO1. A week ago he raised $135m from investors. Bottom line, he wants to compete with OpenAI and Anthropic.
— Gene Munster (@munster_gene) December 5, 2023
Musk is seeking to raise $1 billion for his AI venture, xAI, and has raised almost $135 million so far, according to an SEC filing. Musk denied on Wednesday that xAI is raising money.
The venture is distinct from X and his other companies, but they will collaborate, according to xAI’s website.
“We are a separate company from X Corp, but will work closely with X (Twitter), Tesla, and other companies to make progress towards our mission,” the website reads. The mission is “to advance our collective understanding of the universe.”
Premium+ X users will have access to xAI’s Grok chatbot, Musk said. Grok has a personality that takes after the popular book “Hitchhiker’s Guide to the Galaxy” and has a sense of humor and “a rebellious streak,” according to xAI’s website.
It also has up-to-date global awareness through X, which is a major benefit that other AI rivals do not have, xAI’s website states. It also “answer[s] spicy questions that are rejected by most other AI systems.”
Musk co-founded popular ChatGPT maker OpenAI in 2015, but he departed the company in 2019 and has expressed disapproval of what it has become.
“OpenAI was created as an open source (which is why I named it “Open” AI), non-profit company to serve as a counterweight to Google, but now it has become a closed source, maximum-profit company effectively controlled by Microsoft,” Musk posted in February. “Not what I intended at all.”
ChatGPT tended to take left-leaning positions when questioned on a sampling of cultural and political topics, the Daily Caller News Foundation reported.
The billionaire has also licensed X as a payment processor in 12 states, according to TechCrunch, citing the Nationwide Multistate Licensing System’s database. It is another part of his plan to turn X into an “everything app,” which was a significant benefit to his purchase of Twitter, he said in October 2022.
Numerous advertisers left X shortly after a November report by left-wing activist group Media Matters alleged that ads appear alongside antisemitic content on the platform, as well as a post by Musk that some interpreted as antisemitic. Apple, Comcast, IBM, Lionsgate, Paramount Global, Sony and Warner Bros. Discovery all withdrew their advertising from X following these antisemitism controversies, according to reports.
“Don’t advertise,” Musk said at The New York Times DealBook summit in November. “If somebody is gonna try to blackmail me with advertising, blackmail me with money, go fuck yourself. Go fuck yourself. Is that clear? I hope it is.”
Advertising accounted for about 90% of Twitter’s revenue before Musk bought the platform in October 2022, according to the NYT.
“I have never lost money for those who invest in me and I am not starting now,” Musk told Axios in an email.
X did not immediately respond to the Daily Caller News Foundation’s request for comment.
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