Elon Musk and X - latest AI developments

As of April 2, 2025, Elon Musk's social media platform, X (formerly known as Twitter), has undergone significant transformations and faced various challenges. These developments encompass corporate restructuring, legal battles, data security concerns, political engagements, and strategic initiatives aimed at redefining the platform's role in the digital

ecosystem.​

Merger of X and xAI

In a landmark corporate maneuver, Elon Musk orchestrated a merger between X and his artificial intelligence startup, xAI. This all-stock transaction valued X at $33 billion and xAI at $80 billion, culminating in a combined entity worth over $110 billion. The merger aims to leverage X's extensive real-time data to enhance xAI's AI systems, positioning the new entity at the forefront of AI-driven social media experiences. Notably, the same set of advisors represented both companies in this unconventional deal, and both are incorporated in Nevada, a state known for its less stringent shareholder protection laws compared to Delaware. ​

Legal Challenges

X has been proactive in addressing user privacy concerns by filing a brief with the U.S. Supreme Court. The company seeks to protect user data from broad government access requests, particularly in the case involving James Harper's lawsuit against the IRS. X's intervention challenges the federal government's ability to obtain private user data without a warrant, suggesting such actions violate constitutional protections. This move underscores X's commitment to user privacy, especially as it ventures into financial services with its new digital wallet, X Money. ​Financial Times

Data Breach Allegations

Reports have surfaced claiming that hackers have accessed the user records of approximately 200 million individuals on X. The alleged breach includes the email addresses of these users, raising concerns about data security on the platform. X has yet to release an official statement addressing these allegations.​

Political Involvement and Backlash

Elon Musk's political activities have drawn attention, particularly his substantial financial support for conservative candidate Brad Schimel in the Wisconsin Supreme Court race. Despite Musk's investment of over $21 million, Schimel was defeated by liberal judge Susan Crawford. This outcome is seen as a setback for Musk's political influence and has sparked discussions about the role of significant financial contributions in judicial elections. ​

Financial Performance and Advertiser Relations

Since Musk's acquisition of Twitter in 2022, X is on track to achieve its first year of advertising revenue growth. Projections indicate that the platform will generate $1.31 billion in U.S. ad sales in 2025, a 17.5% increase, and $2.26 billion globally, a 16.5% rise. This growth is partly attributed to Musk's influence in the Trump administration, prompting major advertisers to return to the platform due to concerns over potential legal repercussions. However, X's advertising revenue remains below the $4.5 billion peak in 2021. Notably, companies like IBM, Apple, and Disney had previously suspended their advertising investments following controversies related to content moderation on the platform. ​New York Post

Introduction of AI Chatbot 'Grok'

X has integrated an AI chatbot named 'Grok' into its platform, positioned as a competitor to ChatGPT. Users frequently employ Grok to fact-check tweets or provide context, often in response to misleading or inflammatory posts. However, instead of fostering constructive dialogue, Grok is predominantly used as a tool to belittle and argue against others' posts, leading to increased hostility and entrenched debates. This development has altered the nature of engagement on X, shifting from direct user-to-user interaction to leveraging AI as an argumentative tool. ​Business Insider

Strategic Vision: The 'Everything App'

Elon Musk envisions transforming X into an 'everything app,' akin to China's WeChat, encompassing a wide array of services beyond social media interactions. In line with this vision, X plans to introduce financial and streaming services in 2025, namely X Money and X TV. These initiatives aim to expand the platform's offerings, integrating financial transactions and media consumption into a single application. Additionally, enhancements to the AI chatbot Grok are planned, further diversifying X's functionalities. ​The Times of India+1The Verge+1

Cultural Impact and User Dynamics

The integration of AI tools like Grok into X has reshaped user interactions on the platform. While AI has the potential for beneficial applications, its current use on X appears to exacerbate negative communication patterns. Users often deploy Grok to challenge or undermine others' posts, leading to a more combative environment. This trend raises questions about the role of AI in social media and its impact on discourse quality. ​Business Insider.

Conclusion

Elon Musk's stewardship of X reflects a bold and multifaceted approach to redefining the platform's identity and capabilities. Through strategic mergers, legal advocacy, political involvement, and ambitious plans for diversification, X is navigating a complex landscape of opportunities and challenges. As the platform evolves into an 'everything app,' its ability to balance innovation with user trust, data security, and constructive engagement will be critical in determining its future success.​The Times of India+1The Verge+1