Anthropic takes over compute at xAI's Colossus 1 data center as xAI pivots to infrastructure rental instead of AI model training

Anthropic announced it is buying all the compute capacity at xAI's Colossus 1 data center in Memphis, Tennessee, to focus on Anthropic's enterprise-focused AI products.

xAI is becoming a 'neocloud' — a business that rents out GPUs rather than using them to train its own AI models — a shift that reflects xAI's struggles with Grok, which is not widely used for enterprise tasks or even internally by xAI employees.

The deal comes as SpaceX prepares to go public and plans to dissolve xAI as a separate organization, folding it into 'SpaceXAI,' a move some view as a short-term positioning for the IPO rather than a signal of long-term innovation capability.