Will Elon Musk’s Growing Political Ambitions Help or Hurt X?

As Elon Musk deepens his involvement in politics—now taking on a significant advisory role within the Trump administration—his influence continues to shape both the business and technology sectors. While some major UK and US companies are re-evaluating their stance on advertising with X (formerly Twitter), Musk’s growing political footprint is also triggering backlash internationally, potentially endangering his broader business interests.

The big question remains: Will Musk’s political entanglements revive X’s struggling ad business, or will the global backlash outweigh the benefits?

X’s Financial Struggles Under Musk

Since Musk’s £44 billion takeover of Twitter in 2022, the platform has faced continuous financial challenges. Advertiser confidence took a massive hit following Musk’s sweeping changes, including a reduction in content moderation, mass layoffs, and a rebranding that some saw as poorly executed.

Advertising revenue—previously Twitter’s primary source of income—has been on a sharp decline. In 2022, Twitter’s ad revenue stood at £4.73 billion, but recent projections suggest that this could drop to £2.7 billion by 2027. This downward trend highlights the platform’s struggle to recover its lost business.

Musk had originally hoped that X could offset this revenue drop through its subscription model, particularly via X Premium (formerly Twitter Blue). However, adoption rates have been far below expectations. Reports indicate that only around 1% of X users have signed up for a paid subscription, making it an unsustainable alternative to ad revenue.

With X on track to post a loss for 2024, Musk’s challenge is clear: he must find new ways to bring advertisers back on board and restore the platform’s profitability.

Advertisers Returning to X—For Political Reasons?

Despite these financial struggles, X appears to be gaining favour with some advertisers who see value in aligning themselves with Musk and the Trump administration. Reports suggest that several major brands that previously halted their advertising on the platform are now reconsidering their stance.

For instance, Amazon, which had paused its X spending amid controversies in 2023, is now preparing to resume its full ad campaigns. Apple, another high-profile brand that distanced itself from X, is also said to be weighing a return. This shift may not be due to confidence in X itself, but rather an effort to stay on good terms with Musk and his growing political influence.

Meanwhile, Visa has entered into a partnership with X for its upcoming payments programme, a move that suggests some companies see long-term potential in Musk’s vision for an “everything app.”

This trend aligns with Musk’s ability to use his political clout to put pressure on companies. With the Trump administration known for its punitive approach to governance, some businesses may feel compelled to stay in Musk’s good graces to avoid regulatory scrutiny or political backlash.

Legal Action Against Advertiser Boycotts

One of Musk’s more aggressive moves to counteract the advertising decline has been launching legal action against an organised boycott led by the Global Alliance for Responsible Media (GARM).

Back in 2023, GARM and its coordinating body, the World Federation of Advertisers (WFA), advised brands to halt ad spending on X due to concerns over the platform’s lax approach to harmful content. This contributed to a sharp drop in revenue, prompting Musk’s legal team to take action.

X’s lawsuit alleges that GARM orchestrated an “illegal group boycott”, effectively pressuring advertisers to abandon the platform without legitimate cause. Initially, X named major brands such as CVS, Mars, Ørsted, and Unilever in the lawsuit, though Unilever was later removed after negotiating separately with Musk’s team.

Last week, the lawsuit expanded, adding several new companies to the legal action, including:

• Nestlé

• Abbott Laboratories

• Colgate

• Lego

• Pinterest

• Tyson Foods

• Shell

Musk’s strategy appears to be “naming and shaming” these brands, potentially pressuring them into resuming ad spending on X to avoid bad PR or legal headaches. However, suing advertisers for not buying ads is an unprecedented move that could further alienate brands rather than bring them back.

International Backlash and Potential Business Risks

While Musk’s political ties may be helping him domestically, they are also triggering significant backlash internationally.

Canadian officials, for example, have been distancing themselves from Musk’s companies due to concerns over his political affiliations. Similarly, German and Polish audiences have expressed strong criticism over his alignment with Trump, particularly in light of the administration’s nationalist trade policies.

The United Kingdom has also raised concerns, with political figures and regulatory bodies questioning Musk’s content moderation approach and influence over digital infrastructure.

The biggest risk for Musk’s global business empire comes from potential trade conflicts sparked by Trump’s policies. The “America-first” approach could lead to higher tariffs, stricter regulations, and retaliatory measures from other countries. Given Musk’s close ties to Trump, his companies—including Tesla, SpaceX, and Starlink—could face increased scrutiny or even restrictions in foreign markets.

Can Musk’s Wealth Keep X Afloat?

Even if X continues to struggle financially, Musk has several ways to keep the platform running.

1. Personal Investment – Musk could inject more of his own capital into X, potentially by reallocating funds from Tesla or SpaceX. However, this would be a risky move, as Tesla’s stock price has already been volatile due to Musk’s divided attention.

2. Funding from xAI – Musk’s artificial intelligence company, xAI, is working on AI models that rely on X’s vast dataset. Musk could structure deals where xAI pays X for data access, effectively funneling money into the platform.

3. Government Contracts – With Musk’s growing political influence, there’s speculation that he could secure lucrative government contracts for X, potentially integrating it into public services or political operations. However, such a move would raise serious ethical and legal questions.

Will X Become the “Everything App” for Government?

One of Musk’s long-term ambitions is to transform X into an “everything app,” similar to China’s WeChat, where users can handle payments, messaging, and other daily tasks.

With Musk’s influence in the Trump administration, there’s even speculation that X could be positioned as a preferred platform for government communication and transactions. While this might sound far-fetched, it’s not entirely impossible—especially if Musk can leverage regulatory changes in his favour.

However, this idea raises major concerns over conflicts of interest and potential violations of free market principles. If X were to gain government backing in this way, it could alienate international users and partners even further.

Final Thoughts: A High-Stakes Gamble

Musk’s political ambitions are clearly a double-edged sword for X. On one hand, his connections could help bring advertisers back and open up new revenue streams. On the other, his divisive stances risk alienating global users, advertisers, and regulators.

The future of X will depend on how Musk navigates these tensions. If he can leverage his political influence without alienating too many stakeholders, X could regain its footing. However, if international backlash intensifies, it could push X—and Musk’s other ventures—into even more precarious territory.

Either way, Musk is playing a high-stakes game, and the outcome remains uncertain. Whether X thrives or continues its downward spiral, one thing is clear: Musk’s decisions will have far-reaching implications beyond just social media.