Elon Musk once labeled Anthropic “evil.” Three months later, his companies struck a deal to hand over one of the world’s largest AI supercomputers to the very outfit he criticized.
On May 6, SpaceX and Anthropic announced an agreement giving the maker of Claude models exclusive access to all compute capacity at Colossus 1, the Memphis data center xAI built in record time. The facility packs more than 220,000 Nvidia GPUs, including H100, H200 and GB200 accelerators, and delivers over 300 megawatts. Capacity comes online within the month. Anthropic immediately doubled Claude Code’s five-hour rate limits for Pro, Max, Team and Enterprise users. It eliminated peak-hour restrictions for Pro and Max accounts. API limits for Claude Opus models rose considerably.
But the transaction runs deeper than improved user experience. xAI had already shifted its training to a larger follow-on cluster, Colossus 2. Utilization on Colossus 1 hovered around 11 percent, well below the 40 percent achieved at rival facilities. Leasing the site converts an underperforming asset into steady revenue. Analysts estimate the pact could generate $3 billion to $4 billion annually for SpaceX. Forbes reported the figure.
And. The move arrives as SpaceX absorbs xAI following a $1.25 trillion merger completed earlier this year. The combined entity now operates under the SpaceXAI banner. xAI as a standalone company effectively dissolves. That rebranding and the sudden pivot to infrastructure provider raise pointed questions ahead of SpaceX’s anticipated IPO. Roadshow preparations reportedly begin next month, with the company seeking a valuation between $1.75 trillion and $2 trillion.
TechCrunch captured the industry’s skeptical mood. In a recent Equity podcast episode, host Sean O’Kane called the arrangement “a major heat check before the IPO.” He noted that becoming a neocloud, renting GPUs rather than training frontier models, offers a more believable near-term business. Yet it excites investors far less than the prospect of cutting-edge AI development. “Why be positive when you can be cynical?” O’Kane asked. His co-host Kirsten Korosec acknowledged a positive angle: xAI found a way to generate cash. She added that the shift makes it tougher to portray SpaceX-slash-xAI as a forward-looking innovator when the GPUs serve a competitor. TechCrunch laid out the exchange.
Internal troubles compounded the optics. Reports indicated xAI employees relied on models from other providers rather than Grok. That revelation triggered leadership changes. Several co-founders departed. Musk signaled a fresh start despite the hefty acquisition price SpaceX paid. Grok itself has struggled to gain traction as an enterprise tool or even a dominant consumer chatbot outside its integration with X. The product carries a reputation for generating unpleasant or rule-breaking content. Such traits limit its appeal in corporate settings.
Anthropic, by contrast, reports explosive demand. CEO Dario Amodei recently disclosed that the company experienced 80 times growth in the first quarter instead of the projected 10 times. Paid subscribers slammed into rate limits. Enterprise interest surged. The Colossus 1 capacity serves as a bridge until larger commitments materialize. Those include up to 5 gigawatts with Amazon, nearly 1 gigawatt expected by the end of 2026, and another 5 gigawatts with Google and Broadcom starting in 2027. Anthropic’s announcement detailed the pipeline.
The partnership carries an even more ambitious clause. Both parties expressed interest in collaborating on multiple gigawatts of orbital AI compute capacity. SpaceXAI’s blog post emphasized that terrestrial power, land and cooling constraints cannot keep pace with future requirements. It positioned SpaceX as uniquely equipped for the task thanks to launch cadence, mass-to-orbit economics and constellation expertise. If successful, space-based systems could deliver near-limitless sustainable power with reduced earthly impact. The idea sounds speculative. Yet it forms a core part of the narrative SpaceX now pitches to investors. xAI’s post outlined the vision.
Observers point out the irony. Musk had criticized Anthropic harshly on X, calling it misanthropic and hostile to Western civilization. The company remains blacklisted by parts of the Pentagon while Grok finds favor in Defense Department workflows. Local controversy swirls around Colossus 1 as well. Environmental and community groups in Memphis protested the project’s impact on a historically Black neighborhood. NAACP leaders raised health and equity concerns. Anthropic responded by pledging to cover any consumer electricity price increases tied to its U.S. data centers.
Still, compute scarcity overrides such frictions. “In 2026 AI, compute scarcity is the constraint that overrides every other strategic preference, including who you have to do business with to solve it,” the Forbes analysis concluded. Similar dynamics appear across the sector. Anthropic maintains massive pacts with Microsoft, Nvidia, CoreWeave, Amazon and Google. The field races to secure power, chips and data centers. Supply shortages could persist until 2028.
So the deal monetizes idle hardware. It buys Anthropic breathing room to satisfy customers. It burnishes SpaceX’s credentials as an infrastructure player just as public markets beckon. Yet the arrangement also spotlights xAI’s challenges in model development and internal adoption. Grok trails competitors on benchmarks that matter to enterprises. Training activity appears to have consolidated on the newer cluster, leaving Colossus 1 available for lease.
Wall Street will weigh these signals carefully. A reliable revenue stream from third-party compute offers predictability. Billion-dollar annual figures help any balance sheet. But frontier AI labs command premium valuations precisely because they promise breakthroughs that reshape industries. Renting out yesterday’s supercomputer risks signaling that the boldest ambitions have cooled. SpaceXAI must convince investors the orbital compute gambit and future clusters will restore its position at the edge.
Competition has produced stranger alliances before. This one stands out for its speed and scale. Anthropic gains immediate relief and a potential path to off-world infrastructure. SpaceX turns excess capacity into cash flow and a compelling IPO story. Whether the partnership sparks genuine innovation in space-based systems or simply papers over near-term weaknesses remains the open question. Markets will deliver their verdict soon enough.
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