Elon Musk's X Is The Ideal 'Big-Tech' Company

Elon Musk did it again. His social media company X was the only foreign technology (tech) giant to openly support a new Indian regulation to tackle unfair competition practices by big-tech companies.

This came to light recently in a 235-page report by the Committee on Digital Competition Law, which also carries a draft Digital Competition Bill, now open for public feedback. This bill suggests new requirements for major tech companies like Google, Meta, and X and proposes significant fines for those that do not comply.

Unlike X, other foreign tech companies (including some prominent Indian ones) disagreed with the idea of needing a specific law, "ex-ante" for digital competition beforehand. Ex-ante regulation involves implementing rules in advance to prevent potential issues or problems.

Backing the regulation, X noted that to establish an effective ex-ante framework, regulatory institutions must employ skilled academics trained in monitoring technological advancements and capable of contextualising developments and potential applications in the Indian market.

Additionally, the definition of 'SIDIs' (Systemically Important Digital Intermediaries) should be carefully deliberated, the company said, and data collection by SIDIs should adhere to the standards set out in the proposed Data Protection and Digital Privacy Bill, 2022.

It’s a good look for X, especially in comparison to its big-tech counterparts. But this isn’t a one-off case for Musk’s social platform. In many ways, they are showing the way for what a good big-tech company could look like.

For instance, X has made its algorithm open source. The company has made the code responsible for selecting posts to appear on one’s timeline available on GitHub.

This code includes the recommendation pipeline, which consists of three primary stages: collecting the top tweets from various recommendation sources, prioritising those tweets using a machine learning model, and screening out tweets from blocked accounts, previously viewed posts, or posts deemed unsafe for work.

Musk had pledged to open-source the algorithm before acquiring X. In March 2022, he conducted a Twitter poll asking if Twitter's algorithm should be open source, with approximately 83 per cent of respondents supporting the idea.

After the release of the code, Musk said he aims for “independent third parties to determine, with reasonable accuracy, what will probably be shown to users.” During a discussion on the algorithm's release, he expressed the intention to create “the least gameable system on the internet,” aiming for it to be as robust as Linux, a renowned open-source project.

“The overall goal is to maximise unregretted user minutes,” the chief executive said on his platform.

Musk acknowledged that the initial transparency could be embarrassing but expected rapid enhancement in recommendation quality. He concluded in an X post, “Most importantly, we hope to earn your trust.”

By allowing them to see the source code, thereby promoting transparency, X users (at least those who can make sense of code) are in a position to verify that the software behaves as intended and does not contain malicious code.

Besides, open-source software is educational for developers who might be keen to study how software is built and contribute to projects themselves. (Open source has many other benefits.)

Musk has even called X an “open source news” platform, and revealed that the chatbot Grok, developed by his artificial intelligence (AI) startup xAI, will also be made open source this week.

On X, the bigger accounts with a large following used to crowd out timelines. In response, the company updated its recommendation algorithm in November last year. Announcing the update, Musk said, “This will help surface smaller accounts and posts outside of your friend-follows network,” adding: “As always, this will be made open source and undergo continuous improvement.”

Ever since he acquired X, Musk has taken steps to move from an advertising-based model to a subscription-driven business. This shift is significant because the primary source of revenue for social media platforms is advertising. And why not? Sale of precious space on these platforms, which boast of over a billion monthly users, can help make a lot of money.

However, a service paid for by its users, rather than by advertisers, offers various benefits, both to the platform and to its users.

For instance, users paying for a service typically have a clearer understanding of how the company makes money. This leads to greater trust and transparency, which Musk is serious about.

When users pay, they can breathe easier knowing that the platforms don’t feel the pressure to put the interests and needs of advertisers ahead of theirs. There simply isn’t an incentive for big-tech companies to follow the tune of advertisers if advertising isn’t their dominant source of revenue.

Additionally, privacy levels of the platform might improve with a move to a subscription-driven business, as the need to track user behaviour for targeted advertising purposes gets diminished. This model benefits the paying user, while the platform enjoys a more predictable and stable revenue stream from users as compared to advertising revenue, which ebbs and flows as per market and other conditions.

Besides, who among us enjoys ad clutter? Neither the platform (unless they stand to make a lot of money off it), nor the user. Ads are generally intrusive, irrelevant, and spoil the look and feel of any platform.

X, therefore, is on the right track.

Steps to promote trust and transparency, such as open-sourcing its algorithm and shifting towards a subscription-based model, are likely to hold Musk and the platform in good stead in the long run — even setting them apart as a model for good big-tech business practices going forward.