In a candid statement, Elon Musk shared that Twitter continues to face financial challenges, with expenditures surpassing earnings. The billionaire entrepreneur took to Twitter to express concerns about the platform's negative cash flow, citing a substantial 50% decline in advertising revenue and a heavy debt burden. Musk emphasized the need to achieve positive cash flow before addressing other priorities.
Interestingly, this announcement coincides with Twitter's recent rollout of its ad-revenue sharing program, which commenced payouts to select creators, including a few prominent figures from the far-right community. Additionally, Musk anticipates that the platform's device usage could hit an all-time high in the near future, and he noted that many advertisers who had initially left the platform have since returned or expressed their intention to do so.
Coincidentally, amidst these financial struggles, Elon Musk recently unveiled the establishment of his new AI venture, xAI. The announcement of xAI, Musk's latest endeavor, adds another layer to the evolving AI landscape. As he strives to tackle the complexities of negative cash flow at Twitter, Musk is simultaneously venturing into new realms, further shaping the future of artificial intelligence. The launch of xAI brings forth an intriguing juxtaposition between the challenges faced by Twitter and the innovative pursuits of Musk in the AI domain.
According to research firm Sensor Tower, advertising spending on Twitter experienced a significant 89% drop to $7.6 million over a two-month period earlier this year. Furthermore, Reuters reports that Twitter faces an annual interest payment of approximately $1.5 billion due to the debt incurred during Musk's privatization of the company for $44 billion. These developments underscore the continued financial challenges faced by Twitter, despite the cost-cutting measures implemented over the past year. With Linda Yaccarino, the newly appointed CEO, at the helm, rebuilding Twitter's advertising foundation becomes paramount.