Anthropic has signed a deal to acquire 300 megawatts of compute from the Colossus 1 data center near Memphis, Tennessee, in a move that could significantly impact both companies. Anthropic will pay xAI $1.25 billion per month until May 2029, with a discounted rate for the first two months as xAI ramps up its services. The total revenue from this agreement for xAI could exceed $40 billion.
The transaction details were revealed in SpaceX’s S-1 filing with the SEC. SpaceX stated the deal “allows us to monetize unused compute capacity in our infrastructure.” The contract includes a clause that permits either party to terminate the agreement with 90 days’ notice.
SpaceX also indicated expectations for entering into more similar service contracts in the future, suggesting a broader initiative within the AI landscape. Notably, this deal positions xAI as a hybrid player in the AI market, functioning both as a provider and consumer of data center capabilities.
This hybrid model, referred to as “neocloud,” enables AI firms to lessen infrastructure costs by serving as cloud providers during off-peak usage times. SpaceX characterized the arrangement as an efficient use of resources, stating, “We believe our dual monetization strategy provides multiple pathways to generate returns on invested capital.”
However, the deal also signals potential overcapacity issues within xAI, with the company needing to monetize excess compute resources prior to a public offering. Usage of Grok, xAI’s flagship AI assistant, has reportedly declined significantly in recent months, allowing the company to sell excess capacity to a direct competitor.
