Elon Musk plans to introduce advertising into the answers of X’s artificial intelligence chatbot and power the social media platform’s flailing ads business with AI after the departure of chief executive Linda Yaccarino.

During a live discussion with advertisers broadcast on X on Wednesday, the billionaire entrepreneur said his company would allow marketers to pay to appear in suggestions from Grok, the platform’s chatbot. Grok was developed by Musk’s AI start-up xAI, which acquired X in March for $45bn.

“Our focus thus far has just been on making Grok the smartest, most accurate AI in the world and I think we’ve largely succeeded in that. So we’ll turn our attention to how do we pay for those expensive GPUs,” said Musk, referring to graphics processing units, the costly chips needed to power AI applications.

“If a user’s trying to solve a problem [by asking Grok], then advertising the specific solution would be ideal at that point,” he added, without sharing further details on the monetisation strategy.

In a rare charm offensive with marketers, Musk also outlined plans to further automate the advertising process for brands and improve the targeting of ads using xAI’s technology. Prior to the merger, X’s advertising technology team had been plagued by difficulties in displaying adverts to their intended audience, according to insiders.

Multiple advertising executives have told the Financial Times they want AI companies to sell ad slots in their chatbots, while groups such as OpenAI, the maker of ChatGPT, have openly denied any plans to do so amid fears of a consumer backlash.

In the meantime, brands and advertising agencies have been experimenting with how to promote their products in chatbot search results organically, for example by posting content they believe is more likely to be picked up by the models.

Musk’s announcement comes as some advertisers continue to steer clear of X over moderation issues. Last month, Grok stirred controversy by repeatedly praising Adolf Hitler and sharing antisemitic rhetoric, raising concerns that Musk was rolling out AI technology without proper guardrails.

Recently, X has been diversifying its revenues beyond advertising into premium subscriptions, boosted by the introduction of Grok as a feature for paying users. But Musk has also been frantically fundraising to keep pace in a costly AI race against rivals such as Meta, OpenAI and Google.

In an email sent to some advertisers ahead of Wednesday’s discussion and seen by the Financial Times, X boasted that the company had undergone a “complete transformation” over the past two years in terms of its business and safety efforts.

In particular, it said it had improved its ad auctions, resulting in “significantly lowered costs” for companies bidding for slots. It also said it had improved the relevance of advertising using xAI and retrained models that measure when an ad click becomes a sale.

The volume of conversions — when a user buys a product seen on an advert — had risen by 40 per cent since June for web advertising, X said in the email, while the average cost of advertising had decreased by 7 per cent quarter-on-quarter “across all brand objectives”.

The overtures to advertisers have re-established Musk as the face of X following the departure of Yaccarino in July.

A Madison Avenue veteran, Yaccarino had often acted as the intermediary between marketers and Musk, who previously slammed marketers for pulling spending from the platform, at one point telling some to “go fuck themselves”.

He appeared measured on Wednesday’s call, which he held alongside several other xAI and X executives. Musk said his goal was to “overcome the curse of Twitter” as the place where users came “for a decade and never bought a single thing because the advertising system never actually showed the participants what they wanted”.

Among other changes, his Grok technology will assess how aesthetically pleasing adverts are and prioritise those deemed more so, he said. The company is also planning to build a checkout feature for users to make purchases from ads while remaining in the app.

While some advertisers gave Musk glowing reviews of X’s upgrades during the call, others declined to join, maintaining that the platform’s content still remained too toxic. A media buyer at a top holding company told the Financial Times: “I’m not wasting my time.”

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