Anthropic will pay xAI $1.25 billion per month for compute through May 2029

Anthropic secured 300 megawatts of compute capacity from xAI's Colossus 1 data center near Memphis, Tennessee. The deal runs through May 2029 with a discounted rate for the first two months, potentially bringing xAI over $40 billion in revenue. Either party may terminate with 90 days' notice.

xAI is operating a 'neocloud' model — simultaneously building data centers for internal use while selling excess capacity to external customers. This approach allows the company to offset infrastructure costs when its own usage falls short of capacity.

xAI disclosed the arrangement in SpaceX's S-1 SEC filing, describing it as part of a 'dual monetization strategy.' The company stated it expects to enter into additional similar services contracts.