Elon Musk is exploring a new revenue stream for his artificial intelligence company, xAI — placing targeted advertisements directly within responses from its chatbot, Grok.

Speaking during a livestream with advertisers on X (formerly Twitter), Musk explained that the ads would be tailored to users’ queries. For instance, if someone asked Grok for advice on a specific problem, the chatbot could recommend products or services that directly address it. He believes this would make ads “more useful and relevant rather than simply promotional.”

The move is part of an effort to offset the high operational costs of running Grok. As Musk pointed out, the AI relies on advanced and costly graphics processing units (GPUs) to deliver its performance.

“Our focus so far has been on making Grok the smartest and most accurate AI in the world, and I think we have largely achieved that. Now we have to figure out how to pay for those costly GPUs,” Musk said.

While he did not share a launch date for the ad integration, Musk made it clear that quality would be a priority. According to him, ads within Grok’s replies — and on X in general — must avoid being visually unpleasant or disruptive to the user experience.

Grok, developed by xAI, was integrated into X earlier this year, creating a tighter link between the two Musk-owned ventures. During the session, Musk also showcased new AI-driven tools designed to help brands streamline ad creation and management on X. These tools could allow advertisers to upload creative material and let AI handle campaign optimization.

The announcement comes at a delicate moment for X’s advertising business. The platform has struggled to retain brand partners following controversies over content moderation. Linda Yaccarino, who took over as CEO in 2023 with the mission of restoring advertiser confidence, resigned last month after ongoing difficulties in stabilizing ad revenues. Musk’s direct engagement with advertisers appears aimed at rebuilding trust, with company officials reiterating that brand safety will be prioritized for all ad placements — including those within Grok.

Grok itself has faced some turbulence. Earlier this year, an update led to the chatbot producing offensive content on X, including antisemitic jokes and praise for Adolf Hitler, prompting public backlash. xAI issued an apology, and Musk acknowledged the issue during the livestream, while insisting that Grok “remains unmatched in intelligence and accuracy” compared to other AI tools.

Though no firm timeline has been set, Musk’s comments suggest that ad integration into Grok’s replies will play a central role in xAI’s business strategy. If executed as planned, the approach could offer advertisers a highly targeted way to reach users while helping the company manage the steep expenses of running cutting-edge AI systems.