Major brands are now spending small amounts on advertising on X, recently acquired by Elon Musk’s xAI. According to the Financial Times, this strategy helps companies avoid being seen as boycotting the platform or engaging in a public dispute with Musk.
Since Musk’s rise to prominence during Donald Trump’s presidency, many businesses prefer to maintain a minimal ad presence on X rather than risk damaging their relationship with him. This cautious approach has also been influenced by lawsuits Musk filed against companies that withdrew advertising after his $44 billion acquisition of Twitter in 2022. Just last month, X expanded its lawsuit to include major brands such as Shell, Nestlé, Pinterest, and Lego.
“It could be any amount that’s big enough to keep us off the naughty list,” said Lou Paskalis, CEO of marketing consultancy AJL Advisory and a former media executive at Bank of America. According to Paskalis, this approach is preferable to provoking negative press from Musk, which could impact stock prices and lead to financial losses.
X’s Ad Revenue and Changing Advertiser Landscape
Musk and X CEO Linda Yaccarino aim to restore the platform’s ad revenue to 2022 levels. Market research firm eMarketer estimates that X’s revenue will reach $2.3 billion this year, up from $1.9 billion in 2024. However, this figure remains well below the $4.1 billion the platform earned in 2022 before Musk’s takeover.
Despite the return of major advertisers like Hulu and Unilever, overall U.S. ad spending on X fell by 2% in the first two months of 2025, according to Sensor Tower. American Express has resumed advertising, though its spending is down approximately 80% compared to early 2022.
Meanwhile, four major advertising agencies—WPP, Omnicom, Interpublic Group, and Publicis—have either finalized or are negotiating agreements with X. These deals involve “advance agreements,” where agencies commit to ad spending in advance.
Interestingly, Sensor Tower reports that 35 of X’s top advertisers in 2025 were not on the platform in 2023. This suggests that X is attracting a new wave of advertisers, including brands like MAGA store Rock Paper Sizzle, energy drink company Celsius, and telemedicine provider Hims & Hers.
Industry insiders also note an increase in smaller brands using X’s self-service advertising tools, as well as AI-driven solutions from the platform’s Grok chatbot to automate campaigns. “They will return [to previous levels of ad revenue], it’s just going to be a different set of advertisers,” one source said.
However, not all experts are optimistic, adds NIXSolutions. Ruben Schreurs, CEO of marketing analytics firm Ebiquity, remains skeptical about a full return to previous ad spending levels. “I don’t expect an imminent return to the previous levels of ad budgets going to X,” he said.
As the situation develops, we’ll keep you updated on how brands navigate advertising on X and how the platform adapts to these changes.