Anthropic will pay xAI $1.25 billion a month for computing

Earlier this month, Anthropy The world of artificial intelligence was stunned With a deal to purchase 300 megawatts worth of computing power – to secure full production for the 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 subtext is hard to miss. It appears that xAI has overbuilt its computing power and needs to find a way to monetize it before going public. Grok — xAI’s leading AI assistant — was used decreased significantly In recent months, the servers that the company now sells to one of its closest competitors have been freed up.