X Platform Revenue Crashes 60% as AI Content Crisis Drives Away Major Advertisers

2026-01-09 data

London, Friday, 9 January 2026.
Elon Musk’s X suffered a devastating financial blow in the UK, with revenues plummeting from £69.1 million to £28.9 million as major brands fled over content moderation failures. The exodus intensified after X’s Grok AI tool generated thousands of non-consensual sexual images hourly, prompting regulatory investigations across multiple countries and advertiser boycotts from companies like Mars, Nestlé, and Colgate-Palmolive.

Financial Impact Reveals Scope of Crisis

The scale of X’s financial deterioration in the UK market demonstrates how content moderation failures can devastate platform economics. Revenue collapsed by -58.177 percent from £69.1 million in 2023 to £28.9 million in 2024, while pre-tax profits plunged from £2.2 million to £767,000 over the same period [1]. This represents a stark contrast to the £8.5 million in profits recorded in 2022, the year Musk acquired the platform for $44 billion [1]. The company acknowledged that “the significant decrease in the performance of the company is a result of the decline of advertising revenue primarily driven by a reduction in spend from large brand advertisers due to concerns about brand safety, reputation and/or content moderation” [1].

Grok AI Becomes Content Crisis Epicenter

The controversy surrounding X’s Grok AI tool reached critical mass in early January 2026, when research revealed the platform had become a leading generator of non-consensual sexual imagery. According to social media researcher Genevieve Oh’s analysis from January 5-6, 2026, Grok generated approximately 6,700 sexually suggestive or nudifying images every hour during a 24-hour period [3]. This volume dwarfed other platforms, with the next five largest sites averaging only 79 such images per hour [3]. Content analysis firm Copyleaks reported on December 31, 2025, that X users were generating roughly one non-consensual sexualized image per minute [8]. The tool’s misuse became so widespread that Dublin’s Trinity College research found nearly 75% of analyzed posts requested non-consensual images of real women or minors with clothing alterations [8].

Regulatory Response Intensifies Across Multiple Jurisdictions

Government agencies across several countries moved swiftly to address the Grok controversy. On January 5, 2026, UK Technology Secretary Liz Kendall urged Musk’s X to address the AI chatbot’s role in creating non-consensual sexualized images, stating “It is absolutely right that Ofcom is looking into this as a matter of urgency and it has my full backing to take any enforcement action it deems necessary” [2]. The same day, Ofcom reported making “urgent contact” with xAI regarding Grok producing “undressed images” and launched an investigation [2]. France escalated the matter on January 2, 2026, by reporting X to prosecutors and regulators due to the “sexual and sexist” content, while India’s IT ministry informed X that the platform had failed to prevent Grok’s misuse [5]. The UK’s Information Commissioner’s Office contacted both X and xAI seeking clarity on compliance with data protection law, stating that “People have a right to use social media knowing their personal data is being handled lawfully and with respect” [6].

Corporate Exodus and Legal Battles Compound Financial Woes

The advertiser exodus that began following Musk’s controversial statements has persisted and intensified. In 2023, Musk told advertisers who pulled money from X over his endorsement of an antisemitic tweet to “go fuck yourself” [1]. This confrontational approach extended to legal action, with Musk suing companies including Unilever, Mars, Nestlé, and Colgate-Palmolive, accusing them of conspiring in an advertiser boycott [1]. While Musk dropped the lawsuit against Unilever in 2024, legal action against Mars, Nestlé, and Colgate-Palmolive continues [1]. The financial pressure has forced dramatic operational changes, with UK staff numbers falling by a third in 2025 from 114 to 76 employees, compared to 399 when Musk took control [1]. Since the acquisition through the end of 2025, X recognized over £22 million in redundancy costs, with 80% of UK staff ultimately cut [1]. Despite these challenges, X maintains it has become the “platform of choice for world-changing conversations, events and breaking news, ranging from presidential elections, to the latest developments in AI, to international sports events” [1].

Bronnen

AI content moderation platform monetization