X advertising revenue drops to $367 million as AI infrastructure surges

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SpaceX’s AI segment, which includes X, Grok and AI compute, generated $367 million in X advertising revenue in Q2 2026, down 14% from $426 million a year earlier. Ad sales did improve from $343 million in the first quarter, but the year-on-year decline shows X’s advertising recovery remains incomplete.

Advertising is increasingly being overshadowed by other parts of SpaceX’s AI business. The AI segment generated about $2.56 billion in Q2 revenue, including $2.19 billion from AI solutions and infrastructure, while AI-related capital expenditure reached $15.8 billion. The revenue mix makes the direction clear: compute and AI services are becoming far more consequential than rebuilding Twitter-era advertising economics.

The historical gap remains striking. Twitter generated $1.076 billion in advertising revenue in Q2 2022, its final comparable second quarter before Elon Musk completed the acquisition. X’s latest quarterly ad revenue is roughly one-third of that level, although the platform, ownership structure and revenue model have since changed substantially.

SpaceX has previously linked advertising weakness to technology changes. Its IPO filing said an “overhaul of the Company’s advertising platform” temporarily affected ad sales, while CFO Bret Johnsen linked the latest sequential improvement to the rebuilt ad technology.

The next test is whether that quarter-on-quarter improvement becomes sustained annual growth. For marketers, X should increasingly be judged on measurable campaign performance rather than assumptions that advertiser spending has returned to earlier levels.