Elon Musk’s approach to free speech on his platform, X, has gained many supporters but is not helping to win more business. Ad revenue at the platform, formerly known as Twitter, is still down by 50% on pre-Elon levels. Musk has pledged to reinstate the account of white supremacist Nick Fuentes, despite Fuentes being banned for the second time early last year for violating the platform’s rules. Fuentes, a political activist, has made anti-Semitic remarks and pushed to make America a Christian nation again, which includes diluting the power of influential Jewish people.
Fuentes was originally suspended from Twitter in 2021 for violations of the platform’s rules, including suggesting that state legislators who voted to certify the 2020 election results should face the death penalty. Despite being banned from other platforms like YouTube and PayPal, Musk and the X team reinstated Fuentes’ account in early 2023 as part of a broader effort to give previously suspended users a second chance. After making anti-Semitic remarks in a Spaces chat, Fuentes’ account was banned by X’s team. Musk hopes that Community Notes, a moderation tool, can help users decide what content is acceptable.
Musk is committed to upholding the principles of free speech, which means allowing individuals of all opinions to share their views on the app. However, providing a platform for harmful rhetoric like Fuentes’ comes with consequences, including impacts on ad revenue. X is currently a cash-negative enterprise, despite staff and infrastructure cuts, with a projection to possibly become cash flow positive in the future based on more advertisers returning. Musk’s unpopular decisions could impact brand safety and revenue growth for the app.
Most of Musk’s wealth is tied up in his other companies like Tesla, limiting his capacity to fund X indefinitely. The platform will eventually need to generate its own revenue and become sustainable on its own. Reinstating controversial users like Fuentes complicates the financial outlook for X, as Musk faces pressure to act on his principles at the expense of potential ad partners. Musk’s flexibility in standing on principles and the unclear motivation behind his decisions raise concerns about the future viability of the app and its impact on businesses.
Despite Musk’s wealth, funding X with his personal finances may not be sustainable in the long run. The financial strain on the platform, combined with Musk’s principled stance on free speech, creates a dilemma for X’s future. Advertisers may be wary of partnering with a platform that hosts controversial figures like Fuentes, risking further revenue loss for X. Musk’s commitment to free speech and his willingness to take hits on ad revenue for the sake of principle raise questions about the platform’s long-term sustainability and the impact on its financial performance.