We’re cynical about XAI’s big deal with Anthropic

Anthropic and XAI Announced a great partnership This week, with Anthropic purchasing all the computing capacity at xAI’s Colossus 1 data center in Tennessee.

In the last episode of TechCrunch’s Stocks PodcastKirsten Korosek, Sean O’Kane, and I discuss what the deal could mean for xAI’s parent company SpaceX, as SpaceX prepares to go public and… Apparently planning to disband XAI As a separate organization.

Kirsten did her best to offer a “positive outlook” on the partnership – after all, it’s a new way for xAI to make money. But she also noted that this also suggests that xAI isn’t doing much when it comes to training its leading AI models, and it’s difficult for the company to position itself as an “innovative and forward-looking” company when that’s the case.

Sean then asked: “Why be positive when you can be sarcastic?” From his perspective, this sounds like a “big pre-IPO check.” Yes, Become a new cloud It may be a “more credible business in the near term,” but it is unlikely to excite outside investors in the long term. (And then there Environmental lawsuit faced by xAI over Colossus 1.)

Keep reading for a preview of our conversation, which has been edited for length and clarity.

Sean O’Kane: I always love a surprise, especially when everyone’s eyes are on another ball; Big trial It happens. Apparently, this week, SpaceX, and by extension its artificial intelligence company xAI — which now apparently no longer exists, or isn’t even close to existing, which is as far as we can tell — struck a deal with Anthropic.

Basically, the real version of the deal is that Anthropic is essentially taking over all of the computing at the data center known as Colossus 1 in Memphis, Tennessee, to focus on Anthropic’s more enterprise-focused AI products. There have been a lot of reports about how (Anthropic’s) is looking for more computing (…) and it seems to be an escape valve for them so they can make this deal and get access to all this computing.

In the near term, for xAI and SpaceX, yes, they’re the new cloud now, in the sense that they had to do something with all this computing they were building, because it certainly seemed like they wouldn’t need it for Grok — which, outside of X, isn’t burning the world so much as becoming the new consumer chatbot.

Kirsten Korosek: And we have to say that in terms of what the new cloud is, for those who don’t know, this is the idea of ​​buying GPUs from Nvidia and the like, and leasing them instead of using them for their own AI, and training their own AI models.

So this is a different kind of business, and A point made by our AI editor, Russell Brandom It is that a lot of companies are building data centers, but given the choice between whether to rent them (or use them to train their own models), they would still prioritize using that computation to train their internal AI model. I think this is an important point and suggests that perhaps xAI is not doing much in training the AI ​​model (aspect)

Anthony Ha: Granted, as Sean alluded to, most people wouldn’t necessarily think of Grok – not just because he’s known for some pretty stinky things, if not Frankly, it’s illegalcontent, but not necessarily very sophisticated. Especially if we start talking about enterprise AI, which I know we’ll get to later in this episode, you’re not going to hear a lot about people using Grok for business-critical tasks.

So the question becomes: How can xAI actually make money? Obviously, simply selling infrastructure could be one of the main ways to do this.

Kirsten: And you can take a positive view of that, right? They’ve figured out a way to make money. But I think when you position your company — in this case, SpaceX-slash-xAI — as a forward-looking, innovative company, it’s a hard sell if you’re simply leasing your GPUs and not using them for that innovation.

Shawn: But why be positive when you can be sarcastic? That means this looks like a big heat check ahead of the IPO that we’re about to see SpaceX bring to market.

Anthony, you mentioned that not only was Grok being used for large enterprise tasks, but there were reports that XAI employees were as well Using other modelsThey weren’t even using Grok internally, which caused this big change within xAI, the post Acquisition from SpaceXwhich basically involves All founders are leaving other than Elon Musk(and) basically says he’s starting from scratch on xAI, despite the fact that SpaceX paid $250 billion for it in the run-up to this massive IPO.

And now he says it They are going to solve XAI As a separate entity entirely within SpaceX. He started calling the whole thing SpaceXAI, because this guy loves nothing more than to destroy a brand that has some value – see Twitter.

This might be a more believable business in the near term, and so on some level, I can see this being perhaps more attractive to investors at IPO time, because it’s a little more reliable and certainly more realistic than being a frontier lab developer. But it’s also not the kind of business that would attract the same kind of — at least, in a normal setting — outside investment that we’re seeing going into all the frontier labs.

This is probably one of the biggest points of tension we’ve seen develop during the IPO process.