Anthropic Taking Over All Capacity of xAl’s First Memphis Data Center

Some afternoon news from an unsigned xAI press release:

SpaceXAI has signed an agreement with Anthropic to provide access to Colossus 1, one of the world’s largest and fastest-deployed AI supercomputers.

Built from the ground up in record time, Colossus delivers unprecedented scale for AI training, fine-tuning, inference, and high-performance computing workloads. Colossus 1 features over 220,000 NVIDIA GPUs, including dense deployments of H100, H200, and next-generation GB200 accelerators. The cluster delivers extreme parallel performance for large language models, multimodal systems, scientific simulations, and generative AI at frontier scale.

Anthropic plans to use this additional compute to directly improve capacity for Claude Pro and Claude Max subscribers.

Anthropic confirmed the news via an unsigned press release:

We’ve agreed to a partnership with SpaceX that will substantially increase our compute capacity. This, along with our other recent compute deals, means that we’ve been able to increase our usage limits for Claude Code and the Claude API.

…and included a detail that SpaceXAI¹ left out:

We’ve signed an agreement with SpaceX to use all of the compute capacity at their Colossus 1 data center. This gives us access to more than 300 megawatts of new capacity (over 220,000 NVIDIA GPUs) within the month. This additional capacity will directly improve capacity for Claude Pro and Claude Max subscribers.

Let me repeat part of that for emphasis:

We’ve signed an agreement with SpaceX to use all of the compute capacity at their Colossus 1 data center.

As a native Memphian who has watched xAI pollute our air, make tools for creating horrific content, and go back on its word to local leaders, this is both infuriating and hilarious.

Nothing in this news seems like a win for xAI.

If xAI so badly overestimated demand that it can lease all of Colossus 1’s capacity to a competitor, then the company had no business building a second data center so quickly.

Colossus 2 is believed to be up and running, at least to some degree, and xAI may no longer need the first site. Has xAI moved Grok there, leaving the original data center and its yet-to-be-built water treatment plant open for lease? How much is Anthropic paying xAI for the site? Was this a move to help bring some sanity to xAI’s books as SpaceX plans to go public?

Anthropic seems to be backed into a corner when it comes to capacity. I can’t imagine everyone there was super pumped to be associated with xAI, and the partnership will certainly cause some to sour on the company and its products.

I don’t know if Anthropic will have any real presence in Memphis. Some may see this as a chance for a bit of a reboot when it comes to the public relation issues xAI has faced here, but it I don’t have high hopes for that. Anthropic is merely leasing capacity, not taking over the data center outright.

Even if Colossus 1 were to change hands, the only meaningful thing Anthropic could do (from an environmental standpoint) would be to get the water treatment plant back on track. The site isn’t going to be able to move to cleaner energy anytime soon, no matter what chatbot is running on its servers.

Claude customers will see a benefit, and SpaceX’s books will look a little better, but that’s all the change I see coming with this news.