X Faces revenue drop despite expanding Grok AI access

X, the app formerly known as Twitter, experienced a drop in in-app purchase revenue even after expanding access to Elon Musk’s Grok AI to more users.

Initially available only to Premium Plus subscribers, the AI feature was extended to mid-tier Premium subscribers in March, aiming to boost subscriptions amid rising competition from OpenAI’s ChatGPT, Google’s Gemini, and others.

However, according to data from app intelligence firm Appfigures, X’s net revenue fell to $7.6 million in May 2024, down from $8 million in April and $8.2 million in March.

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The firm suggested this decline could be due to creators posting frequently but with low-quality content to generate income, potentially turning off some users. Additionally, the Premium subscription price might be too high for many potential subscribers.

Compounding the issue, X is facing intense competition from other text-first social apps like Instagram’s Threads, Mastodon, Bluesky, and the recently launched noplace. The app is also struggling with brand recognition issues following its name change from Twitter. In May, X saw 3 million downloads on the App Store, a 32% drop from the 4.4 million downloads recorded a year ago.

Despite these challenges, X continues to adapt its strategies to regain user trust and boost its revenue streams.