Anthropic to pay xAI $1.25 billion a month for data center compute

In short: Anthropic will pay Elon Musk’s xAI $1.25 billion per month to use xAI’s data center capacity through May 2029.

What happened

Anthropic, an AI company, has agreed to buy “compute” from xAI. Compute is the processing power from large numbers of computers in a data center, similar to renting a huge fleet of trucks when you need to move a lot of goods at once.

According to TechCrunch, the deal covers about 300 megawatts of compute and secures the full output of xAI’s Colossus 1 data center near Memphis, Tennessee. Anthropic will pay $1.25 billion per month through May 2029, with a discounted rate for the first two months while xAI ramps up operations.

Details came from SpaceX’s S-1 filing with the US Securities and Exchange Commission, which is paperwork companies file ahead of selling stock to the public. SpaceX said the deal helps “monetize unused compute capacity” in its infrastructure. Either company can end the contract with 90 days’ notice.

Why it matters

AI systems need huge amounts of computing power, and that power is expensive and sometimes hard to get. This deal shows how even major AI companies may rent capacity from competitors when they need it, and how companies that built more servers than they currently use can try to earn money by leasing the extra capacity. The filing also suggests xAI may pursue more contracts like this.

Source: TechCrunch AI