Downloads of X’s separate Grok app have declined significantly in recent months, pointing to an uphill battle for Elon Musk’s xAI project as it looks to compete with bigger players in the market.
According to a new report from the Wall Street Journal, which references data from AppMagic, downloads of the Grok app fell nearly 60% to around 8.3 million in April, declining from a peak of more than 20 million downloads in January.
WSJ reported that the January peak, came amid Grok’s nudification trend, when thousands of unauthorized, sexually suggestive images of people were being generated by the AI chatbot every hour. But that was before X took action to combat misuse of the tool.
In order to limit the problems, X restricted some Grok functions to paying users only. That apparently shrunk audience interest, though it does also align with xAI’s broader effort to make more money from its artificial intelligence project. Reporting from Bloomberg suggested that the project has burned through up to $1 billion per month, as the company works to catch up with OpenAI, Meta and Google on AI development.
That catch-up push has seen xAI invest heavily in massive data center projects to facilitate Grok processing and ensure that the chatbot is able to cater to user demand.
But it seems that hasn’t improved Grok’s standing yet. WSJ also said that business interest in Claude is rising, along with Google’s Gemini, while Grok lags significantly behind the pack in terms of corporate adoption.
Musk himself has promoted his AI chatbot whenever possible, and in particular, he has touted its advanced video generation capacity, which now enables users to create longer video clips.
Yet, in March, amid reports of several top engineers leaving the project, Musk admitted that xAI “was not built right first time around,” prompting an entire rebuild of the project with new leadership.
That rebuild seemingly isn’t bearing fruit yet, as interest in Grok continues to wane. This seemingly reflects a broader shift away from X as well.
According to X’s EU DSA report, which the company released in March, X’s overall usage in Europe dropped by 11 million monthly actives in the second half of last year, equivalent to an almost 15% decline in the EU market.
To be fair, that is only one region, and X has a lot more users in the U.S. and Japan. But the broader trend seems to suggest that both X and Grok are losing momentum, which could pose significant problems for xAI moving forward.
The AI project has sought to raise more money through a new compute partnership with Anthropic, which will give Anthropic access to xAI’s Colossus I data center. Anthropic has also expressed interest in xAI’s orbital AI compute project, in partnership with SpaceX. It could be that xAI will put more emphasis on this element, and provide the back-end infrastructure for other AI projects, as opposed to building its own.
Because SpaceX is best-placed to build this ambitious project — and if orbital data centers are a realistic consideration — then SpaceX could still stand to benefit from the AI boom.
But if xAI can’t compete, and X usage continues to decline, thus reducing data intake for xAI’s projects, Musk could eventually re-shift his company’s focus, and cut his losses, rather than trying to push Grok as a viable AI alternative.
But if that happens, what does that mean for X?
X’s declining ad revenue means that its real value now is as a data source for Grok. If that’s not what it’s going to be used for moving forward, it could also provide diminishing returns.
Maybe xAI will look to sell X data to another AI project, which will again move the cost of development onto others, as opposed to xAI bearing those costs for a failing AI model.
Either way, it seems that xAI will have some tough decisions coming up as it considers the viability of its projects.
