Anthropic’s $1.25B Monthly Compute Deal Reveals a New AI Business Model

When Anthropic quietly locked down 300 megawatts of compute capacity earlier this month—effectively reserving the entire Colossus 1 data center outside Memphis—it signaled something bigger than a simple infrastructure deal. According to details buried in SpaceX’s latest SEC filing, the arrangement carries a staggering price tag: Anthropic will pay xAI $1.25 billion each month through May 2029. The first two months come at a discount while xAI finishes ramping up the facility. Total revenue for xAI could exceed $40 billion over the life of the contract.

The filing reveals that xAI is essentially renting out idle server space, stating that the deal “allows us to monetize unused compute capacity in our infrastructure.” Either party can exit with 90 days’ notice. More tellingly, xAI expects to sign more contracts like this, positioning itself as both an AI builder and a cloud provider—a hybrid model some are calling “neocloud.”

Anthropic’s deep pockets aside, the deal hints at a strategic pivot for xAI. Usage of its flagship assistant, Grok, has dropped sharply in recent months, leaving servers underutilized. By selling capacity to a direct competitor, xAI offsets the cost of overbuilt infrastructure ahead of a likely public offering. SpaceX’s filing frames it as a smart hedge: “Our dual monetization strategy provides multiple pathways to generate returns on invested capital.” In a market where most companies either build for themselves or for others, xAI is trying to do both.