Under Elon Musk's leadership, the X platform is undergoing a comprehensive transformation, reflecting Musk's radical innovation and ambition to reshape social media, from advertising strategies to core communication features, as well as the AI technology and company structure behind it. Recently, the X platform announced that it will charge based on the vertical size of advertisements and launched a new private communication feature, XChat, which supports "Bitcoin-style" encryption. However, these innovations come alongside the EU's increasingly stringent regulatory scrutiny and ongoing discussions about the future direction of the X platform.
Musk stated on the X platform that to optimize user experience and prevent advertisers from creating "giant ads" that harm user browsing, the platform will start charging based on the vertical size of advertisements. This means that ads occupying the entire screen will cost more than those occupying a quarter of the screen. This strategy aims to encourage advertisers to design more creative and less intrusive ad formats, thus striking a balance between commercial interests and user experience. This move also reflects Musk's emphasis on the platform's user experience, attempting to guide advertising behavior through economic leverage.
The X platform recently launched the new private communication feature XChat, marking a significant layout in the communication field. XChat supports several advanced features, including:
- End-to-end encryption: Ensuring the privacy and security of communication content
- Self-destructing messages: Enhancing the temporality and confidentiality of messages
- Arbitrary file transfer: Improving the convenience and functionality of communication
- Audio and video calls without a phone number: Lowering the user threshold and providing a more flexible communication method
Notably, XChat is developed based on the Rust programming language and employs a Bitcoin-like encryption architecture. This "Bitcoin-style" encryption design suggests XChat's pursuit of security, decentralization, and resistance to censorship, aiming to provide users with a more trustworthy private communication experience. Additionally, the X platform has obtained money transmission licenses in 39 U.S. states, further fueling speculation about the potential integration of cryptocurrency payments, including Dogecoin (DOGE). Although the integration of Dogecoin has not been confirmed, Musk's historical influence on the token remains a significant factor in market sentiment. Recently, Dogecoin showed signs of new strength after rebounding 17% from weekend lows, with strong buying pressure maintaining the critical $0.16 support area.
Musk's ambitions for artificial intelligence are also reflected in the X platform's strategy. He stated that he would use Grok 3.5 (and possibly Grok 4) with advanced reasoning capabilities to rewrite the entire corpus of human knowledge, adding missing information and removing errors, then retraining. Musk believes that there is too much "garbage" in any foundational model trained on uncorrected data.
In response, former Chinese billionaire Zhao Changpeng (CZ) remarked that much knowledge involves history and perspectives, both of which have multiple versions and intense debates, which is why many countries/cultures are independently building AI models. CZ's viewpoint reminds us of the complex relationship between the objectivity and subjectivity of knowledge, as well as the challenges AI may face in addressing these issues.
Despite the continuous innovation in products and technology on the X platform, the regulatory pressure it faces is also increasing. Musk's $33 billion acquisition of the X platform has triggered a new round of scrutiny from the EU. EU regulators are assessing the potential fines that may be imposed on the X platform under the Digital Services Act (DSA).
The European Commission recently posed new inquiries to X, investigating the company structure after xAI's acquisition of the X platform. Insiders revealed that this investigation reflects the European Commission's concerns that xAI's control over X may affect the scale of any potential fines. Under the Digital Services Act, fines are linked to X's global revenue, meaning that the size and structure of the merged company may influence the potential fine amounts.
Insiders indicated that the European Commission may announce the first fine against X for alleged violations before the summer recess in August. The amount of the potential fine has not yet been determined and may face delays. X can also commit to addressing the EU's complaints to avoid penalties. European Commission spokesperson Thomas Renier stated that they are closely monitoring changes in X's corporate structure and confirmed that they have sent information requests to X, as these changes may affect the public investigation.
Musk is leading the X platform through a radical transformation, showcasing his ambition to build a "super app" through innovations in advertising models, the launch of encrypted communication, and deep integration of AI technology. However, this rapid and disruptive change also comes with significant regulatory challenges, particularly from the EU's stringent scrutiny. Whether the X platform can find a balance between innovation and compliance, and ultimately realize Musk's grand vision, will be a focal point of interest in the crypto and tech sectors for the foreseeable future.
Related: Musk hopes Grok AI will "rewrite the entire repository of human knowledge"
Original article: “Musk's New Policy on the X Platform: Charging for Ads by Size, XChat Launches 'Bitcoin-style' Encryption, EU Scrutiny Intensifies”
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