X Increases X Premium+ Price by 30%

Despite X Premium (formerly Twitter Blue) failing to take off the way Elon Musk had hoped, the platform is looking to find new ways to increase its revenue stream as it seeks to integrate more AI elements, which come at a significant cost, while also offsetting its loss of ad revenue.

In this direction, just before Christmas, X announced that the price of its X Premium+ subscription tier, the most expensive X subscription option, will increase by 30%, to fund the ongoing expansion of its offering.

According to X:

“We are updating the price of the X Premium+ subscription on December 21, 2024. New subscribers will pay the updated price starting on that day. If you are an existing subscriber and your next billing cycle begins before January 20, 2025, you will be billed at the current rate; otherwise, the new rate will begin with your first billing cycle after that date.”

The new price adds an additional $6 per month to the price of X Premium+, which rises from $16 to $22 per month, or $229 per year.

X says the higher price will allow him to make an offer a completely ad-free experience for its highest paying users, while allowing higher usage limits for its Grok AI models.

It will also give Xu more capacity to pay creators through its own updated revenue share model:

“We’ve changed our revenue share model to reward content quality and engagement, not just ad views. Your Premium+ subscription fee contributes to this new, fairer system where creator earnings are tied to the total value they bring to X, not ad impressions.”

X announced this change back in Octoberwith a program that allows creators to take a cut of ad revenue for ads displayed in their post replies (and seen by X Premium subscribers), to creators who pay based on the engagement of paying users.

The additional cost of X Premium+ will now contribute to this, giving X a bit of extra income to share, while also, as noted, funding its ongoing AI development.

Although, technically, this is done through xAI, which is a separate company from X itself. xAI, which is in charge of the models and systems that power its Grok AI chatbot, has just been shut down $6 billion Series C funding roundadding to the $6 billion it also raised back in Maywhich allows him to expand his business.

xAI used most of that funding to build its “Colossus” AI data center in Memphis, which includes 100,000 Nvidia H100 GPUs to operation xAI. This puts it on a par with the artificial intelligence systems currently operated by Meta and Google, although both have significantly greater capacity and ability to expand further at this stage.

But for now at least, the new AI computing cluster has put xAI in a position of legitimate competition in AI development, as it looks set to gain a foothold in the space and cash in on the expected AI boom in the years to come.

It’s not clear how the X Premium+ price increase could directly contribute to this, but X has continued to deliver new updates to its Grok chatbot (the latest improved imaging), while also running a stand-alone application Grok in some regions.

And it uses X to promote this:

So there is an intertwining there, although it is not clear where the lines are drawn between the two, so it is impossible to say how one contributes to the other in this respect.

Regardless, that’s one place X says the extra subscription revenue will go. Although, as noted, the price increase could also be an attempt to cover up the lack of X Premium subscribers, which left another hole in X’s revenue projections.

According to analysis by TechCrunch and AppFigures as of October, X Premium currently has a total of approximately 1.3 million subscribers, which includes all tiers. You’d pay a fraction of that for the X Premium+, and as such, a $6 price increase in this category won’t be much of a change in that regard.

But those paying for the highest tier are less likely to cancel, so maybe X is just cashing in where it can. Still, the prospect of the X Premium ever becoming a major revenue driver, as Elon Musk originally projected, seems highly unlikely at this stage.

In his original business strategy plan for Twitterwhich he shared with potential investors shortly after he took over the app (and before rebranding to “X”), Musk predicted that Twitter Blue (now X Premium) would reach 69 million paying subscribers by 2025 and 159 million by 2028.

It’s still a long, long way from that, and outside of price hikes like these, it’s hard to see how X will be able to generate any real revenue from its subscription offering.

Unless it comes out with some amazing extras to sweeten the deal. I’m not sure what they might even be, but it seems likely that artificial intelligence will play a role somehow.

Personally, I argue that social platforms are overestimating the usefulness of features like AI image creation for ordinary users. But maybe Elon and Co. they have something else up their collective sleeves.