Anthropic has agreed to pay SpaceX $1.25 billion per month for AI compute capacity through May 2029 — a contract that could generate more than $40 billion in total revenue for the Elon Musk-linked company. The deal, announced around May 6 and confirmed by multiple sources this week, hands Anthropic full access to xAI's Colossus 1 data center in Memphis, Tennessee, while xAI shifts its own training workloads to the newer Colossus 2 facility.
What Anthropic Is Getting
Colossus 1 is not a modest facility. According to verified reporting, the Memphis data center delivers over 300 megawatts of compute capacity and houses more than 220,000 NVIDIA GPUs — a mix of H100, H200, and next-generation GB200 accelerators. Anthropic is ramping to 100% utilization of that capacity within May 2026, with a discounted rate applying through June 2026 before full pricing kicks in.
The compute will be used for inference workloads and to expand capacity for Claude Pro and Claude Max subscribers — directly raising usage limits on Claude Code and the Claude API. In other words, Anthropic isn't buying this compute for research experiments; it's buying it to serve paying customers at scale right now.
Why This Deal Makes Sense for Both Sides
The timing is telling. Prior to this agreement, Colossus 1 was reportedly running at roughly 11% utilization by xAI — a staggering amount of idle GPU capacity sitting in Memphis. xAI had already migrated its primary training operations to Colossus 2, leaving Colossus 1 as an expensive asset generating little return. Leasing the entire facility to Anthropic at $1.25 billion per month transforms that stranded asset into one of the most lucrative infrastructure contracts in AI history.
For Anthropic, the calculus is equally clear. The AI compute market is severely constrained, and securing three-plus years of guaranteed capacity at scale — even at a premium — removes a critical bottleneck. Claude's commercial momentum has been building, and without sufficient inference infrastructure, subscriber growth hits a hard ceiling.
| Detail | Specifics |
|---|---|
| Monthly payment | $1.25 billion |
| Contract term | Through May 2029 |
| Total potential value | $40+ billion |
| Facility | Colossus 1, Memphis, Tennessee |
| GPU count | 220,000+ (H100, H200, GB200) |
| Power capacity | 300+ megawatts |
| Ramp-up period | May–June 2026 (discounted rate) |
| Termination clause | 90 days notice, either party |
| Announced | ~May 6, 2026 |
The Bigger Picture
This contract is notable not just for its size but for what it signals about the AI infrastructure landscape. Two companies that compete in AI model development — xAI with Grok, Anthropic with Claude — have found it mutually beneficial to share compute resources rather than fight over them. The deal also underscores how capital-intensive the next phase of AI deployment has become: $1.25 billion per month is not a rounding error even for well-funded AI labs.
Both companies have also indicated interest in a longer-term collaboration: developing multiple gigawatts of orbital AI compute capacity. That ambition, while speculative for now, hints at a relationship that could extend well beyond the current contract's 2029 expiration. The 90-day termination clause on either side keeps the arrangement flexible, but the scale of the ramp-up suggests Anthropic is treating this as a foundational infrastructure commitment, not a stopgap. For more on xAI's expanding role in the AI ecosystem, see our SpaceX coverage.
Sarah focuses on Tesla Energy, SpaceX missions, and the broader Musk AI portfolio. Former data analyst in clean energy. Based in San Francisco.
Sources verified at publish time. Spotted an inaccuracy? Email editorial@basenor.com.
