Anthropic Pays xAI $1.25B Monthly for Compute

Anthropic will pay xAI $1.25 billion per month through May 2029 for 300 megawatts of compute from the Colossus 1 data center in Memphis, Tennessee. The deal, potentially worth over $40 billion total, was revealed in SpaceX's SEC filing. The arrangement highlights xAI's apparent overcapacity problem, as usage of its Grok AI assistant has declined sharply. By selling spare compute to a direct competitor, xAI is adopting a so-called neocloud model — building infrastructure for both internal use and external clients to maximize returns.