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Twitter battles negative cash flow as Elon Musk launches new AI venture

Written by Thu 20 Jul 2023

Twitter’s cash flow remained negative due to an almost 50% drop in advertising revenue and heavy debt load, according to Elon Musk. This falls short of his expectations in March that Twitter could reach a positive cash flow in June.

The time frame that Musk is referring to is unclear. He stated Twitter was on course to post a revenue of £2.2 billion ($3 billion), down from £3.8 billion ($5.1 billion) in 2o21.

After laying off thousands of employees and cutting cloud service bills, Musk stated that the company reduced its non-debt expenditures to £1.1 billion ($1.5 billion) from a projected £3.4 billion ($4.5 billion) in 2023.

Musk’s cost-cutting efforts at Twitter failed to reestablish its cash flow. Despite ad revenues not replenishing as quickly as expected, Musk stated that July is ‘looking a bit more promising’.

Twitter faces an annual interest of £1.1 billion ($1.5 billion) following Musk’s £33 billion ($44 billion) purchase that turned the company private.

Twitter entices content creators

Twitter recently announced a new promise of ad revenue for content creators.

On Thursday, Twitter said that chosen content creators would be eligible to claim some ad revenue that the company earns in order to entice more creatives to the site.

Twitter has been criticised over lax content moderation in the past, which was swiftly followed by an exodus of advertisers leaving the site. Many did not want their ads appearing alongside inappropriate content.

Ad sales appear to be a priority for Twitter after former Head of Ad Sales, Linda Yaccarino, was hired to replace Musk as Twitter’s CEO.

Since her appointment in June, Yaccarino told investors that Twitter plans to focus on video, creator and commerce partnerships. Political and entertainment figures, payment services, and news and media publishers are said to be in early talks to work with the social media company.

Musk’s new AI venture to use Twitter data

xAI, a new artificial intelligence company founded by Musk, will use public tweets as a data set to learn from. His new company is separate from X Corp, but will work closely with Twitter, Tesla and other companies, according to its website.

Privacy concerns have been raised by Twitter users and privacy groups regarding how their data will be used.

Musk said xAI will seek to build a ‘good AGI’ in its mission to understand the true nature of the universe.

“From an AI safety standpoint … a maximally curious AI, one that is trying to understand the universe is, I think, going to be pro-humanity,” said Musk on Twitter.

This new venture follows the success of ChatGPT by OpenAI, a company co-founded by Musk. Public figures and celebrities, including Musk himself, have expressed fears regarding the risks of AI. Among the concerns are the dangers of developing the technology without suitable safe regulation, as well as the non-consensual use of intellectual property to train models.

Musk has said that he has pushed for meetings with White House officials and stressed the necessity of regulating AI. The billionaire even called for a temporary halt in AI development due to fears about propaganda, job displacement, and loss of control. But since then, Musk has softened his stance on the risk of AI taking over humanity.

Other AI companies have faced legal challenges in recent years, with Clearview AI being fined £7 million ($5.3 million) last year by the Information Commissioner’s Office for using web images of people to create a global online database. More recently, the Daily Mail has prepared for a legal battle with Google regarding the alleged unauthorised use of online news stories to train Google’s AI platform known as Bard.

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Written by Thu 20 Jul 2023

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