X Integrates Ads into Grok AI Responses, Targeting $25B AI Search Ad Market

Elon Musk's X is set to monetize its Grok AI chatbot by embedding advertisements directly within its responses. This strategic pivot aims to capitalize on the burgeoning AI search advertising sector, projected to grow from $1.04 billion to $25 billion in the U.S. by 2029. The MOVE follows the departure of X's advertising chief and positions Grok as a conduit for brands to engage users through context-aware, conversational placements.

Advertisers will gain access to a novel format—sponsored answers woven into AI-generated shopping and decision-making interactions. With 39% of users already leveraging generative AI for commerce, Grok's responses become prime digital real estate. xAI's targeting enhancements promise improved ROI, aligning with broader industry shifts from static ads to dynamic, AI-driven engagement.