Elon Musk Eyes Ads in Grok Chatbot to Fund Costly AI Hardware
Speaking during a livestream with advertisers on X (formerly Twitter), Musk explained that the ads would be tailored to users' queries. For instance, if someone asked Grok for advice on a specific problem, the chatbot could recommend products or services that directly address it. He believes this would make ads 'more useful and relevant rather than simply promotional.'
The move is part of an effort to offset the high operational costs of running Grok. As Musk pointed out, the AI relies on advanced and costly graphics processing units (GPUs) to deliver its performance.
'Our focus so far has been on making Grok the smartest and most accurate AI in the world, and I think we have largely achieved that. Now we have to figure out how to pay for those costly GPUs,' Musk said.
While he did not share a launch date for the ad integration, Musk made it clear that quality would be a priority. According to him, ads within Grok's replies — and on X in general — must avoid being visually unpleasant or disruptive to the user experience.
Grok, developed by xAI, was integrated into X earlier this year, creating a tighter link between the two Musk-owned ventures. During the session, Musk also showcased new AI-driven tools designed to help brands streamline ad creation and management on X. These tools could allow advertisers to upload creative material and let AI handle campaign optimization.
The announcement comes at a delicate moment for X's advertising business. The platform has struggled to retain brand partners following controversies over content moderation. Linda Yaccarino, who took over as CEO in 2023 with the mission of restoring advertiser confidence, resigned last month after ongoing difficulties in stabilizing ad revenues. Musk's direct engagement with advertisers appears aimed at rebuilding trust, with company officials reiterating that brand safety will be prioritized for all ad placements — including those within Grok.
Grok itself has faced some turbulence. Earlier this year, an update led to the chatbot producing offensive content on X, including antisemitic jokes and praise for Adolf Hitler, prompting public backlash. xAI issued an apology, and Musk acknowledged the issue during the livestream, while insisting that Grok 'remains unmatched in intelligence and accuracy' compared to other AI tools.
Though no firm timeline has been set, Musk's comments suggest that ad integration into Grok's replies will play a central role in xAI's business strategy. If executed as planned, the approach could offer advertisers a highly targeted way to reach users while helping the company manage the steep expenses of running cutting-edge AI systems.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hindu
15 minutes ago
- The Hindu
The difficult path for Trump's ‘one big budget bet'
The most debated government downsizing reform that has been implemented in recent history has been the Department of Government Efficiency (DOGE) initiative under the Donald Trump administration in its second term. The initiative aims to reduce U.S. federal spending, deficit, debt and interest burden, streamline government operations, and enhance government efficiency. The initiative was much in the news with the appointment of Elon Musk, to advise and guide the government on the initiative, and his declaration that the overall goal is to achieve a leaner government by cutting the deficit and reducing the number of federal agencies from over 400 to 99. Root cause of deficit and debt The need for a smaller government was felt by the Trump administration due to enormous government spending and deficits. The size of the U.S. government, measured by public expenditure as a percentage of GDP, on average, was 36.49% from 2001 to 2024. Surprisingly, this was the smallest among the seven major advanced economies (MAE). France (56.53%) had the largest government, followed by Italy (49.81%), Germany (46.64%), Canada (41.24%), the United Kingdom (41.09%), and Japan (37.56%). The size of the government in the U.S. has remained the smallest among the MAE for most of the last 25 years. Yet, overall fiscal balance and government debt have been higher in the U.S. when compared to the MAE. In the triennium ending (TE) 2024, the U.S. had a fiscal balance and debt burden of (-)6.0% and 119.5% of GDP, respectively, compared to the figures of (-)4.1% and 108.6%, respectively, for the MAE. The underlying reason is the lower revenue collection in the U.S. The total revenue of the U.S. government as a percentage of GDP on an average was the lowest (30.55%) during the period 2001–2022 compared to France (51.48%), Italy (45.93%), Germany (44.93%), Canada (39.92%), and the U.K. (36.63%). Between 2001 and 2022, the U.S. has clocked the lowest tax-GDP ratio of 19.27% as against 28.59% for Italy, 28.12% for France, 27.99% for Canada, 26.89% for the U.K., 22.70% for Germany, and 32.74% for OECD countries. Initiatives and outcomes The several expenditure reforms the DOGE has implemented are the termination of unused federal government office space leases, cancellation of wasteful contracts, recovery of misallocated funds, federal workforce optimisation involving initiatives such as hiring restrictions, workforce reduction, and offering voluntary buyouts, deregulatory measures aimed at ensuring lawful governance and reducing red tape. There is also Artificial Intelligence-based monitoring of federal employee activity, productivity assessment, and detection of inefficiencies, identifying and consolidating overlapping functions across departments, and cutting down overseas humanitarian and development spending. DOGE follows a transparent communication strategy by publicly sharing updates (on X or DOGE's portal) on the outcomes. The total estimated expenditure savings from contract/lease cancellations and renegotiations, grant cancellations, fraud and improper payment detection and elimination, asset sales, employee reductions and regulatory changes have been $190 billion, which amounts to $1,180 per taxpayer. DOGE has made the distribution of government grants transparent through a payments portal, which allows citizens to see recipient-wise payments of federal grants. DOGE's Workforce Portal provides information on the agency-wise size of the U.S. government civilian workforce. To streamline layoffs, it has implemented the 'Workforce Reshaping Tool', a modernised version of the Pentagon's Automated Reduction in Force (AutoRIF) software, which assists in terminating federal employees based on criteria such as seniority and performance. So far, approximately 2,60,000 federal employees have been laid off, retired early, or accepted buyouts. Several federal regulations were repealed and modified, with a cost savings of $30.1 billion due to reduced regulatory compliance; also, 1.8 million words have been deleted from the rules of several Federal regulations. DOGE publishes a unique unconstitutionality index (UI) measuring the extent of bureaucracy's role in shaping federal policy. As per UI, for every law passed by Congress in 2024, there were about 19 rules created by the bureaucracy. The path ahead However, DOGE's journey has seen an unexpected turn after Elon Musk publicly disagreed with U.S. President Donald Trump over the provision incorporated in the much-debated One Big Beautiful Bill (OBBB) for removing tax credits offered to purchase electric vehicles. The OBBB is a legislative extension of the DOGE reform, as it aims to embed multiple fiscal priorities and DOGE-style government efficiency reforms into a single federal law. Ironically, by opposing OBBB, Mr. Musk contradicted his initiatives as an adviser to DOGE. However, the bigger challenge facing the DOGE initiative is that its extended form, the OBBB, is unlikely to resolve the U.S.'s deficit and debt problem, as the tax cuts proposed in the OBBB far exceed the spending cuts, leading to an addition of $3.2 trillion to the U.S. national debt over the next decade. Currently, the U.S. has the lowest and below-OECD-average corporate tax rates among the MAE, lower effective tax rates on the rich, and tighter secrecy laws that enable tax evasion by wealthy individuals and corporations. Therefore, unless efforts are made to boost government revenues, Mr. Trump's 'One Big Budget Bet' of reducing America's deficit and debt through DOGE-style expenditure reforms is unlikely to pay off. Sthanu R Nair teaches Economics and Public Policy at the Indian Institute of Management Kozhikode, Kerala. Pratik Sinha is a consultant for a multinational firm. He was an Assistant Director, Nehru Yuva Kendra Sangathan, Ministry of Youth Affairs and Sports, Government of India
India.com
2 hours ago
- India.com
Meet G Venkataraman who forced Elon Musk to shut down his shop, Musk will never forget this Indian genius due to...
Ganesh Venkataraman left Elon Musk's Tesla and co-founded DestinyAI. (File) In a major setback for Elon Musk, Tesla has shuttered its Dojo supercomputer unit, reportedly after Ganesh Venkataramanan, an Indian-origin former Tesla executive, left the company and co-founded AI startup DestinyAI, along with other former top executives who quit Musk's auto firm. Why Elon Musk shut down Tesla Dojo? According to a Bloomberg report, Tesla is dissolving the team that was tasked with developing its Dojo supercomputer, after several top executives who worked on the project left the company and flocked to DestinyAI– an AI startup co-founded by former Tesla Dojo head honchos– Ganesh Venkataramanan, Bill Chang and Ben Floering. As per the report, Tesla's Dojo head Peter Bannon has also left the company, and is likely to join Venkataraman's DestinyAI. Earlier this month, Tesla took a major hit when around 20 members of its Dojo team left the company to establish DensityAI, an AI startup 'focused on data center services for industries from automotive to robotics.' Following the mass exodus, Tesla shifted the remaining Dojo employees to other areas within the company, Bloomberg reported. What did Tesla Dojo do? First introduced by Tesla CEO Elon Musk in 2019, the Dojo was described as a 'super powerful training computer', which would be capable of training AI chips by processing huge amounts of vehicle video data. These AI chips would be then used to power Tesla's patented 'Autopilot' technology that are installed in its self-driving cars. At the time, Tesla's Dojo was touted as the next big thing by market analysts, and was predicted to give the company a major lead in the sector, with Morgan Stanley estimating in 2023 that the project would increase the market cap of the Elon Musk-led automaker by a whopping $500 billion. How Tesla plans to proceed? However, after the recent turn of events, Tesla is planning to partner with chipmaking giants Nvidia and AMD for computing power, while a deal with Samsung is in the pipeline for chip manufacturing. 'It is not right for Tesla to spend its resources on two different AI chip designs. Tesla AI5, AI6 and subsequent chips will be very good for inference and also for training,' Elon Musk wrote on X, hinting that Tesla will now focus on AI chips that can run AI systems used in cars with more precision and accuracy. Notably, Tesla has witnessed declining sales in recent times due to increased competition, and Elon Musk's political affiliations.
Economic Times
4 hours ago
- Economic Times
Can Trump's Fannie Mae and Freddie Mac IPO plan slash mortgage rates? Bill Ackman says...
Synopsis Donald Trump is reportedly planning to IPO Fannie Mae and Freddie Mac, potentially the largest IPO in history. Billionaire Investor Bill Ackman suggests merging the two mortgage giants to reduce mortgage rates and government oversight costs. Ackman believes privatization could yield substantial gains for the government, citing their improved capitalization and government backing. AP American hedge fund manager Bill Ackman took to X, formerly known as Twitter, and one way to reduce mortgage rates would be to merge government-sponsored enterprises Fannie Mae and Freddie Mac US President Donald Trump Saturday seemed to acknowledge reporting by The Wall Street Journal on Friday that he plans to IPO Fannie Mae and Freddie Mac by the end of this year. The President and his economic advisers are planning a historic sale of stock in Fannie Mae and Freddie Mac, the government-owned mortgage giants that help provide stability and affordability to America's home loan market. Reacting to the development, American hedge fund manager Bill Ackman took to X, formerly known as Twitter, and one way to reduce mortgage rates would be to merge government-sponsored enterprises Fannie Mae and Freddie Mac. He suggested the merger move would help reduce mortgage rates and achieve huge synergies both in their operations and in the trading price. ALSO READ: 'Ban Gay sex, end women's voting': Pete Hegseth sparks controversy for re-posting pastor's radical message Bill Ackman said Fannie and Freddie merger would also reduce the costs and risks of government way to reduce mortgage rates would be to merge Fannie and Freddie. A merger would enable them to achieve huge synergies both in their operations and in the trading price and spreads of their MBS, savings which could be passed along to consumers in the form of reduced mortgage rates, Ackman wrote in his post. "A merger would also reduce the cost and risks of government oversight as there would be only one institution that would require FHFA oversight. I suspect that this is @realDonaldTrump 's idea as implied by his post below. It's a really good one," his post read. US-government owned twin giants, Fannie Mae and Freddie Mac are tasked with expanding credit availability in the American market by securitising mortgages. Their shares surged over 20 per cent on Friday after the Wall Street Journal reported that the Trump administration may privatise the two institutions this year. ALSO READ: Powerball jackpot rises to $479 million: Who won lottery jackpot last night? Lotto results, drawing time US President Donald Trump has previously met the top leadership of US investment banks such as Citigroup, the Bank of America, Goldman Sachs and JPMorgan Chase to explore potential public offerings of the twin mortgage giants, Reuters reported, citing an the plans have not been finalised yet, and Trump continues to weigh various options, according to a senior administration official. But the White House believes an initial public offering of up to 15% of the two companies' shares could raise $30 billion, which could make it the largest IPO in has been weighing an IPO for years now. During his first term, Trump attempted — but ultimately failed — to privatize Fannie Mae and Freddie Mac, removing them from government conservatorship. Now, in his second term, he has revived the push. In May, he wrote on Truth Social that he was 'giving very serious consideration to bringing Fannie Mae and Freddie Mac public,' adding that he would consult with his Cabinet before making a decision 'in the near future.'Trump has argued for the monetisation of these two institutions, which were brought under US government control in the aftermath of the 2008 financial crisis. In May this year, Trump floated the idea while emphasising that the government will maintain its implicit guarantees for the securities issued by the two institutions. ALSO READ: Last planet parade of 2025 happening today? How to watch the rare planetary alignment in the US Trump backer Bill Ackman, a long-time shareholder in the twin behemoths, has repeatedly called for their privatisation. Ackman, founder, Pershing Capital Management, told Forbes magazine last month that the US government is the preferred stockholder of the twins, and in a position to realise gains worth $300 billion. He argued that the two institutions were 'vastly better capitalised' today than for the past 60 two institutions are not banks, but tap creditworthy mortgage buyers and pack the mortgages in securities to be sold on the market, Ackman explained. Fannie Mae and Freddie Mac have guarantees worth $7 trillion coupled with enormous cash flows, apart from a government backing, underlining their ability to weather any future crisis, Ackman added.
