Anthropic will pay xAI $1.25 billion a month for computing

Earlier this month, Anthropic surprised the AI ​​world with a deal to buy the equivalent of 300 megawatts of computing power, securing full production for its Colossus 1 data center near Memphis, Tennessee.

It turns out that computing at this scale isn’t cheap. Anthropic will pay xAI $1.25 billion per month through May 2029, at a reduced rate for the first two months as xAI completes its ramp-up. All told, the deal could net XAI more than $40 billion in revenue.

Details of the deal emerged from SpaceX’s S-1 filing with the Securities and Exchange Commission. The company said the deal “allows us to monetize unused computing capacity in our infrastructure.” The terms of the deal allow either party to terminate the contract with 90 days’ notice.

“We expect to enter into additional similar service contracts,” the filing said.

The move gave xAI a mixed position in the AI ​​market. Most players either build data centers for themselves or build data centers for others to use – rarely both at once. This emerging model, sometimes called the “new cloud,” allows AI companies to offset infrastructure costs by acting as a cloud service provider when they are underutilized.

SpaceX says this arrangement represents a smart use of resources. “We believe our dual monetization strategy provides multiple paths to generating returns on invested capital,” she wrote. But the implication is hard to miss: xAI appears to have overbuilt its computing power and needs to find a way to monetize it before going public. Use of Grok – xAI’s leading AI assistant – has declined significantly in recent months, freeing up servers that the company is now selling to one of its closest competitors.