Europe is walking away from X, advertising revenue has fallen dramatically from the Twitter era, and Musk’s grand user-growth claims are increasingly colliding with independent measurements. But X is no longer just a social network. It is now a strategic component of Musk’s much larger AI machine.
Elon Musk bought Twitter promising to transform it.
He renamed it X.
He radically changed its verification system, moderation policies, advertising strategy and business model.
He repeatedly insisted that the platform was becoming more important, more active and more influential.
But four years after Musk's takeover, one uncomfortable problem keeps refusing to disappear:
The audience is shrinking.
The latest evidence comes from Europe.
Under the European Union's Digital Services Act, X is required to disclose information about its users and moderation activity twice a year.
The latest disclosure shows another decline in X's EU user base.
And this is not an isolated statistical blip.
X's EU audience has been trending downward since November 2023, with the platform's second-half 2025 user count falling roughly 15% before remaining around that lower level into 2026.
That matters because Europe is one of the world's most sophisticated digital markets.
And it provides something that Musk's own public claims do not always provide:
independent regulatory visibility into how many people are actually using the platform.
Musk says X is booming. The data tells a different story.
This is where the X story becomes difficult to reconcile.
Musk and X executives have repeatedly promoted enormous engagement numbers.
But independent measurement paints a much less spectacular picture.
SimilarWeb estimates cited in the reporting put X's mobile monthly active users at approximately 302 million in June 2026, with daily mobile active users around 123.7 million.
X, meanwhile, reported approximately 550 million monthly active users in May.
The two figures are not directly comparable—SimilarWeb does not capture web activity and its estimates have methodological limitations—but the enormous gap demonstrates why X's headline user numbers should not simply be accepted without qualification.
And the EU disclosure gives the independent data another layer of credibility.
This is no longer merely about whether Musk's numbers are technically accurate.
It is about what the numbers actually mean.
A social network can claim hundreds of millions of accounts and still have a much smaller actively engaged audience.
For advertisers, real attention matters more than headline registrations.
Then there is the advertising problem
This may be the most devastating part of the story.
X's advertising business has not merely failed to explode as Musk once envisioned.
It has collapsed compared with Twitter's pre-Musk era.
According to figures reported from SpaceX's 2026 financial disclosures, X generated approximately $710 million in advertising revenue during the first half of 2026, including $367 million in the second quarter.
That was approximately $160 million less than the comparable period in 2025—an 18.4% decline.
But compare it with Twitter before Musk.
During the first half of 2022, Twitter generated roughly $2.2 billion in advertising revenue.
That means X's first-half 2026 advertising revenue was down roughly 70% from the first half of 2022.
Think about what that means.
Musk bought a major advertising-supported social network.
Four years later, the advertising engine is dramatically smaller.
That is not a cosmetic problem.
It is a fundamental business problem.
Musk once imagined a completely different X
The irony is that Musk did not buy Twitter expecting a shrinking advertising business.
His ambitions were enormous.
Reporting at the time indicated that Musk's plans contemplated Twitter generating approximately $12 billion in advertising revenue by 2028.
He also envisioned tens of millions of paying subscribers, eventually reaching well over 100 million.
Those ambitions now look radically different against the actual advertising figures.
Instead of becoming an advertising juggernaut, X has watched its core advertising business contract.
Instead of converting the majority of its enormous audience into paying customers, the subscription business appears to represent only a small fraction of the reported user base.
Social Media Today estimated that an annual subscription revenue run-rate of approximately $1 billion, combined with an assumed average subscription price of $8 per month, would imply roughly 10.4 million paying users.
Against 550 million reported monthly active users, that would amount to less than 2%.
In other words:
The vast majority of people using X are still not paying X directly.
And advertisers appear increasingly unwilling to provide the revenue that once carried the business.
That is an extraordinarily difficult position for a conventional social-media company.
But X is no longer a conventional social-media company
And this is where Elon Musk may have quietly changed the rules.
In February 2026, SpaceX acquired xAI.
And xAI had already acquired X in 2025.
SpaceX's own regulatory filings now describe X as part of its AI segment, alongside Grok and AI infrastructure. The filing explicitly describes X as a real-time information, entertainment and free-speech platform within SpaceX's AI business.
That changes everything.
Because X no longer has to justify its existence purely as a social network.
It can also be treated as infrastructure.
A giant stream of human conversations.
News.
Opinions.
Images.
Videos.
Political arguments.
Consumer behaviour.
Breaking events.
Cultural trends.
Search queries.
Public reactions.
Real-time language.
All of that has value to an artificial-intelligence company.
And Musk controls both sides of the equation.
X is now part of the AI machine
The acquisition of xAI by SpaceX was officially announced on February 2, 2026.
SpaceX's filings subsequently described its AI segment as encompassing Grok, X and AI computing infrastructure.
This creates a completely different economic calculation.
Suppose X's advertising business continues to struggle.
Suppose European users continue declining.
Suppose subscription growth remains modest.
Does that necessarily mean Musk has failed?
Not anymore.
If X produces valuable data that helps improve Grok, recommendation systems, search, advertising technology or other AI products, the platform can create value elsewhere in the conglomerate.
That is the hidden transformation.
X may no longer need to win as a traditional social network if it can become strategically valuable to the AI business.
And that is why simply asking whether X is profitable may no longer capture the whole story.
But there is a major problem
Data needs people.
AI cannot consume a social network that nobody uses.
If X's active audience continues shrinking, the value of its real-time data stream could eventually deteriorate.
There is a difference between having 550 million registered or reported monthly users and having hundreds of millions of people actively producing useful information.
There is also a difference between a platform filled with genuine human conversation and one increasingly dominated by automated accounts, recycled content, engagement farming and AI-generated material.
The quality of the data matters.
The diversity of the data matters.
The volume matters.
And most importantly:
Human beings have to keep showing up.
That makes the EU decline significant.
It is not simply a European regulatory statistic.
It is a warning about the underlying asset Musk is trying to preserve.
Europe has become an important stress test for X
The EU has imposed far more aggressive digital-platform regulation than the United States.
X has faced sustained scrutiny from European regulators over its moderation systems, transparency obligations and platform practices.
The European Commission fined X €120 million under the Digital Services Act in December 2025 over its blue-check system and transparency practices. X subsequently submitted proposed changes.
The significance extends beyond the fine.
Europe is forcing X to disclose information about how the platform operates.
That makes the EU one of the few jurisdictions where outsiders can regularly compare X's public narrative with regulatory disclosures.
And the comparison is becoming uncomfortable.
Musk can say engagement is exploding.
European filings can show declining users.
X can highlight new features.
Independent measurement can show declining mobile activity.
The company can point to Grok integration and AI ambitions.
Advertisers can look at the shrinking advertising business.
Those realities can all exist simultaneously.
The advertiser problem is harder to solve than Musk's critics sometimes admit
Advertising does not come back simply because a billionaire declares that it should.
Advertisers buy audiences.
They buy attention.
They buy predictable environments.
They buy brand safety.
They buy measurable conversions.
They want to know that the people seeing an advertisement are real people who might actually buy something.
A platform experiencing user decline has a fundamental problem.
Every advertiser eventually asks:
How many valuable people are still here?
And:
How much does it cost me to reach them?
If X's answer becomes less attractive than the answers offered by Meta, Google, TikTok, LinkedIn or other platforms, advertisers have alternatives.
That creates a brutal feedback loop:
Fewer users → weaker advertising proposition → less advertising revenue → less money to invest in the platform → potentially weaker product → fewer users.
Musk's answer has increasingly been to diversify beyond advertising.
Subscriptions.
Payments.
Grok.
AI.
Creator monetisation.
Business services.
But diversification does not automatically solve the underlying audience problem.
The most important number may not be revenue
It may be retention.
A social network survives because people return.
Every day.
Every week.
Every month.
If the platform is losing people in one of its most important markets for multiple reporting periods, the question is not simply:
“How much revenue did X make?”
The question is:
Why are people leaving?
Are they dissatisfied with moderation?
Are they tired of political conflict?
Are competitors offering a better experience?
Are advertisers reducing activity?
Are users moving to alternative networks?
Is the platform becoming too dominated by Musk himself?
Or is the social-media market simply fragmenting?
Whatever the answer, the decline is strategically important.
And Musk has created a fascinating contradiction
Musk's greatest achievement with X may ultimately have nothing to do with turning it into the world's dominant social network.
He may have turned it into something else.
A massive information layer attached to an AI company.
That is potentially far more consequential.
SpaceX's filings explicitly place X inside its AI segment.
And SpaceX is simultaneously building enormous AI computing capacity.
xAI has already raised $20 billion and said it was scaling massive GPU infrastructure at Colossus I and II.
SpaceX also describes AI computing as one of its major strategic businesses.
The pieces are therefore becoming interconnected:
X produces data.
Grok consumes and exploits AI capabilities.
SpaceX provides enormous computing infrastructure.
Starlink provides global connectivity.
SpaceX provides the corporate umbrella.
And Musk controls the ecosystem.
That is a much bigger story than whether X has lost another percentage point of European users.
But it also creates a dangerous concentration of power
One person now sits at the centre of an extraordinary collection of technological assets.
A social network.
A frontier AI company.
A satellite internet network.
A rocket company.
AI computing infrastructure.
And increasingly sophisticated digital services.
SpaceX's own filings confirm that X and xAI have been folded into this broader corporate structure.
This creates enormous strategic possibilities.
But it also raises questions regulators and society should not ignore.
What happens when a social network becomes an AI data supplier?
Who controls the data?
How is user-generated content used?
How much influence should one private individual have over a platform carrying political debate for hundreds of millions of people?
What happens when the company operating the platform also controls the AI system trained or informed by its data?
And what happens when that same owner controls satellite communications and other critical infrastructure?
These are no longer merely questions about Twitter.
They are questions about technological power.
X may be failing as Twitter — while succeeding as something else
This is the paradox.
If we judge X purely as the advertising-supported social network Musk purchased in 2022, the numbers are ugly.
European users are declining.
Advertising revenue is dramatically below the Twitter era.
Independent measurements suggest substantially lower mobile activity than X's headline user figures.
Subscription penetration remains relatively small.
The grand advertising ambitions have not materialised.
On those metrics, X is struggling.
But if we judge X as a strategic component of Musk's AI empire, the calculation changes.
A platform does not necessarily need to maximise advertising revenue if it provides valuable data, distribution, user feedback and AI-training signals to a larger business.
That may be Musk's escape route.
But it comes with a condition:
X must remain alive.
It needs people.
Real people.
Active people.
Lots of them.
Because the moment the platform becomes a shrinking digital museum populated increasingly by automated accounts, its value as a real-time representation of human society begins to decline.
The Musk problem is therefore no longer simply “Is X profitable?”
The more interesting question is:
Can Musk stop X from shrinking before the AI empire becomes dependent on the data stream?
That is the real battle.
Because Musk has successfully transformed the business architecture around X.
But architecture does not create users.
Money does not automatically create culture.
And an AI company cannot manufacture the authentic human conversation that originally made Twitter valuable simply by owning the servers.
The people have to stay.
And right now, in Europe at least, they are not.
X is entering a new phase
The Twitter era was about advertising.
The Musk era began with the promise of subscriptions, payments and an “everything app.”
The SpaceX era may be about something else entirely:
data, AI and infrastructure.
That could eventually make X far more valuable than Twitter ever was.
Or it could become an elaborate mechanism for hiding the decline of a social network inside a much larger corporate empire.
We do not know yet.
But the latest European numbers should not be dismissed.
They are a warning.
The audience is the foundation.
The advertisers are the money.
The data is the strategic asset.
And Musk's AI ambitions need all three.
So when X reports another decline in European users, the question should not be:
“Is X dead?”
That is too simplistic.
The real question is much more important:
How long can Elon Musk keep X strategically valuable while its traditional social-media business continues to deteriorate?
That is the question the next few years will answer.
And unlike the old Twitter, the answer will now affect far more than a social-media company.
It could determine the strength of one of the world's most ambitious privately controlled technology empires.
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