Questions Linger About the Long-Term Viability of X

Why It Matters

The revenue drop threatens X’s long‑term profitability, forcing reliance on Musk’s other ventures for cash. This dependence ties the platform’s fate to SpaceX’s IPO and broader AI investments.

Key Takeaways

• X ad revenue fell 45% from 2022 to 2025.
• European active users dropped 15% in late 2025.
• xAI merger provides temporary funding, but burns cash.
• SpaceX IPO could inject billions, sustaining X operations.
• Threads gains 400M users, threatening X ad market.

Pulse Analysis

Musk’s acquisition of the former Twitter has reshaped the platform’s strategic direction, pushing it toward an "everything app" that blends social interaction with financial services. The March 2025 merger with xAI created a financial bridge, allowing X to lean on AI‑driven funding while xAI leverages the platform’s data stream. Yet xAI’s own cash burn and the looming SpaceX IPO—projected at a $2 trillion valuation—mean X’s runway is tied to the success of Musk’s broader empire rather than its own profit centers.

Financially, X’s ad revenue has contracted by roughly 45% since Musk took over, falling to $2.26 billion in 2025. Cost‑cutting measures have mitigated losses, but the company remains cash‑negative, relying on cross‑subsidies from SpaceX and xAI. Usage metrics add uncertainty: European active users slipped 15% in late 2025, and the platform’s claim of 600 million monthly active users appears stagnant despite higher download numbers. The discrepancy suggests a churn rate that offsets new sign‑ups, weakening the data pool essential for both advertising algorithms and xAI’s training models.

Competitive pressure intensifies as Meta’s Threads reaches 400 million monthly active users and continues to grow. Advertisers, wary of X’s brand‑safety controversies and declining engagement, are shifting spend toward more stable environments. Consequently, X’s future hinges on whether SpaceX’s anticipated IPO can deliver the capital needed to sustain operations and fund the long‑term "everything app" vision. Without a clear path to independent revenue, X may remain a subsidized side‑project within Musk’s portfolio.