In a time marked by global conflicts and economic uncertainties, Elon Musk, the enigmatic leader of SpaceX, Tesla, X and several other ventures, often seems to exist in a universe of his own making. Last month, at this year’s Cannes Lions Festival, Observer experienced a rare encounter with the billionaire near one of the beaches in the French city. On June 19, coming out of his onstage interview with the U.K. advertising agency WPP, we caught Musk awaiting his car in an unexpectedly cheerful dad mode, cradling his three-year-old son, X Æ A-Xii. Seizing the moment, Observer asked Musk about his social media company, his own experience with it as an avid user, and his renewed commitment to “interesting and entertaining” advertising on the platform following recent clashes with advertisers.
In late 2023, following the breakout of the Israel-Hamas war, several major advertisers on X, including The Walt Disney Company, Warner Bros. Discovery and Apple, suspended ad spending on the platform after seeing some of their ads being placed next to antisemitic content and Musk endorsing a post attacking the Jewish communities. In response to the advertiser exodus, Musk issued a blunt retort: “Don’t advertise.” Speaking at the New York Times’ DealBook Summit in November, Musk asserted that those worried about his conduct should cease their spending on X, a platform historically dependent on ad revenue.
More than six months later, the X owner now says he does believe in brand safety and the freedom of choice. “Advertisers have the right to appear next to content compatible with their brands. For example, Red Bull might be more adventurous than brands selling baby toys,” Musk told Observer. “But insisting that there can be no content they disagree with is not acceptable.”
Musk reiterated his vision for X to be a “global free speech platform where people from a wide range of opinions can voice their views.” “In some cases, advertisers insisted on censorship. If we have to choose between censorship and money or free speech and losing money, we’ll pick the latter,” he said.
Like every social media platform, X still relies heavily on ad revenue and is struggling to turn around that business despite various initiatives led by CEO Linda Yaccarino, a former ad executive at NBCUniversal. X’s revenue measured at $1.48 billion in the first half of 2023, down nearly 40 percent from the same period in 2022, according to a recent Bloomberg report, citing regulatory documents. In the first quarter of 2023, the most recent fiscal period with available data, X recorded a net loss of $456 million, the documents showed.
In a significant shift in his tone, Musk emphasized the importance of high-quality advertising. “The effectiveness of advertising varies from total spam to essentially content,” he said. “If you’re shown an ad for something you want when you want it, that’s content. If it’s for something you’d never buy, that’s bad. I’m a fan of advertising that’s artistically interesting and entertaining.”
To that end, X is working toward the goal of making ads as interesting as user-generated content on the platform using A.I. to match users with the ads they see. “We populate a vector space for each user and correlate it with content, giving a high probability that someone will be interested in the ad,” Musk explained.