X Introduces Grok AI Ad-Generation Tools

X has launched AI-generated advertising tools powered by Grok AI, aiming to simplify ad creation and attract advertisers back to the platform.

The automated system allows businesses to generate ad content using artificial intelligence, reducing production costs. However, concerns about brand safety and content moderation persist, as past failures in ad approval raise questions about whether AI can effectively oversee campaign placement.

The rollout coincides with X’s ongoing financial struggles, as the company seeks $44 billion in additional funding. Investors remain cautious, with banks such as Morgan Stanley and Barclays struggling to offload $13 billion of X’s debt amid uncertainty about the platform’s long-term revenue potential.

Starting to roll out Grok powered X Ads interface.

Grok can now create beautiful ads, analyze your campaign performance, and recommend improvements, all within your X ads interface.

Rolling out to all SMBs using X ads today! pic.twitter.com/b58x8FgjW3
— Sid Rao (@sidgrao) February 21, 2025

Grok AI’s Role in X’s AI Advertising Push

The AI-generated ad tools are powered by Grok 3, the latest version of Musk’s AI chatbot. Recent benchmark tests position Grok 3 ahead of OpenAI’s GPT-4o and Anthropic’s Claude 3.5, particularly in structured reasoning and coding tasks. On the Math (AIME’24) benchmark, Grok 3 scored 52, significantly outperforming GPT-4o’s 9. Similarly, in science-based reasoning (GPQA), Grok led with a score of 75, surpassing competitors like Claude 3.5 and DeepSeek-V3, which both scored 65.

X’s AI ad tools include “Prefill with Grok”, which scans an advertiser’s website to generate AI-driven ad copy, and “Analyze Campaign with Grok”, designed to provide real-time performance optimization insights. The company is positioning these features as a way to automate advertising while making campaign management more accessible for smaller businesses.

Content Moderation Concerns Persist

While AI-generated ads may simplify campaign creation, X’s track record on ad moderation has led to skepticism. Before the German national elections, the company and Meta Inc. approved multiple political ads containing hate speech, in spite of existing EU policies prohibiting such content. This raises concerns that AI-generated advertising could inadvertently amplify misinformation or place brand content in unsuitable environments.

Regulators are closely watching how AI is integrated into advertising. In the EU, X is currently under investigation for potential violations of the Digital Services Act (DSA), which mandates that platforms mitigate risks related to misinformation. If AI-generated ads fail to meet compliance standards, X could face financial penalties and further restrictions on its European operations.

Will AI-Generated Ads Convince Advertisers to Return?

Despite X’s efforts to automate advertising, major brands remain hesitant. While AI-generated ad content can reduce costs and improve campaign efficiency, the underlying issue driving advertisers away has been trust. Advertisers want assurances that their campaigns will not appear alongside misinformation or inflammatory content—something X has struggled to control.

The advertising industry has increasingly prioritized transparency, and it remains to be seen whether AI automation alone can rebuild confidence.

Competitors such as Google and Meta have also incorporated AI-driven ad tools but have paired these developments with strict brand safety measures. X, in contrast, has reduced its human moderation workforce, placing more responsibility on automated systems to prevent harmful ad placements. The risk is that AI-generated content, if not properly monitored, could further alienate brands rather than bring them back.

Regulatory Pressure and the Risks of AI in Advertising

Beyond advertiser skepticism, X faces growing scrutiny from regulators. The European Commission’s oversight of X under the Digital Services Act signals broader concerns about the risks AI-generated content poses to public discourse. If X’s AI ad system is found to facilitate misinformation, it could lead to further regulatory intervention, restrictions, or financial penalties.

Political advertising is a particularly sensitive area. AI-generated ad campaigns could potentially be misused for rapid mass production of misleading or manipulative political content, a scenario that has already raised concerns among EU regulators. With upcoming elections in multiple countries, how X enforces its AI ad policies will be a key test of whether it can operate within legal frameworks.

The Bigger Picture: Musk’s AI-Driven Vision for X

X’s AI-generated ad push is part of a broader strategy to transform the platform beyond social media. Musk has frequently spoken about turning X into an “everything app,” integrating AI-powered search, financial services, and video content. However, all of these ambitions require steady revenue streams, and advertising remains a critical part of the platform’s financial foundation.

Grok AI’s strong benchmark performance demonstrates its potential, but whether that potential translates into effective AI-generated advertising is still unproven. If advertisers remain cautious, X may need to explore additional monetization strategies beyond AI-generated content. The success or failure of this initiative will not only shape X’s future as an advertising platform but also define its broader AI ambitions.