In a bid to bolster its struggling bottom line, X has
launched the latest iteration of its Grok AI chatbot, making it available
exclusively to paying subscribers. The social media giant hopes that Grok 2,
with its advanced capabilities, will entice more users to sign up for X Premium
and Premium+ plans, offsetting the platform's dwindling ad revenue.
The new Grok 2 AI assistant is being touted as a
state-of-the-art tool, integrating both text and vision understanding while
leveraging real-time data from the X platform. Premium users will have access
to two models: Grok-2, the flagship AI with advanced features, and Grok-2 mini,
a faster, lightweight version that balances speed and answer quality.
According to xAI, the company behind Grok, the latest
iteration outperforms industry leaders like Claude and GPT-4 on the LMSYS
leaderboard in terms of overall Elo score. This suggests that Grok 2 could be a
game-changer in the generative AI market, offering users a more intuitive,
versatile, and steerable experience across a wide range of tasks, from seeking
answers to collaborating on writing and coding projects.
The launch of Grok 2 comes at a critical juncture for X, as
the platform grapples with a steep decline in ad revenue since Elon Musk's
takeover in 2022. Reports indicate that X's ad revenue has plummeted by
approximately 70%, while the app has also seen a significant drop in active
users, particularly in Europe, where it lost 5 million users over the past
year.
Compounding X's financial challenges are the increasing debt
servicing costs associated with the loans Musk obtained to purchase the app.
This has put additional pressure on the company to find alternative revenue
streams and get its business back on track.
While X faces an uphill battle, Elon Musk's pet AI project,
xAI, may provide a much-needed lifeline. In May, xAI secured an impressive $6
billion in funding from investors, including Saudi Prince Alwaleed bin Talal,
who has shown a keen interest in investing in AI projects. This influx of
capital could help support the development of Grok and its integration with the
X platform.
As xAI relies on data from X to power its systems, there may
be opportunities for Musk to funnel funding between the two projects, providing
X with an alternate source of revenue outside of its direct streams. However,
the exact mechanics of this arrangement remain unclear.
Despite the potential support from xAI, X will ultimately
need to stand on its own as a sustainable business. Musk himself has
acknowledged this, although his "free speech" approach to content
moderation may continue to clash with advertisers' demands for brand safety and
assurance.
Musk's original vision for X involved maximizing
subscription revenue through X Premium, with the goal of subscriptions
eventually accounting for 50% of the platform's total revenue. While X is still
far from achieving this target, the advanced Grok 2 model is the latest attempt
to attract more paying subscribers and reduce the app's reliance on ad dollars.
As the AI hype train shows signs of slowing down and
numerous other AI tools flood the market, it remains to be seen whether Grok 2
will be the game-changer X needs to rejuvenate its platform and secure its
financial future.
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