---
title: "Anthropic will pay xAI $1.25B per month for compute"
url: https://stacklist.com/card/fadf9133-03ad-4980-b45d-6db307b2ebbe
source_url: "https://techcrunch.com/2026/05/20/anthropic-will-pay-xai-1-25-billion-per-month-for-compute/"
stack: https://stacklist.com/c/finance/stack/8334c164-f5d5-4ce5-aa58-8b4fe9d231c0
summary: "Anthropic will pay xAI $1.25 billion per month through May 2029 for compute capacity at the Colossus 1 data center near Memphis, Tennessee, in a deal potentially worth over $40 billion. The arrangement, revealed through SpaceX's S-1 filing, highlights xAI's shift to a \"neocloud\" model to monetize excess infrastructure capacity amid declining Grok usage."
tags: "anthropic, xai, compute-deal, data-centers, neocloud, spacex, ai-infrastructure"
key_entities: "Anthropic (organization), xAI (organization), SpaceX (organization), Colossus 1 data center (location), Memphis, Tennessee (location), Grok (technology), neocloud (concept), Tim De Chant (person), dual monetization strategy (concept)"
classification: "notes"
content_hash: "sha256:19eb7c2f709d15d4dacccb1a15cdc4b4f9b8400db3edd1e0ee66efe84fd16da8"
acp_version: "0.2"
token_counts_approximate: 847
visibility: public
agent_accessible: true
status: "final"
---

# Anthropic will pay xAI $1.25B per month for compute

In Brief Posted: 2:29 PM PDT · May 20, 2026 Image Credits: Jakub Porzycki / NurPhoto / Getty Images Tim De Chant Anthropic will pay xAI $1.25B per month for compute Earlier this month, Anthropic surprised the AI world with a deal to buy 300 megawatts’ worth of compute — securing the entire output of the Colossus 1 data center near Memphis, Tennessee. Turns out, compute at that scale isn’t cheap. Anthropic will be paying xAI $1.25 billion per month through May 2029, with a discounted rate for the first two months as xAI completes its ramp-up. All told, the deal could bring xAI over $40 billion in revenue. Details of the transaction emerged from SpaceX’s S-1 filing with the SEC. The deal, the company said, “allows us to monetize unused compute capacity in our infrastructure.” The terms of the deal allow either side to terminate the contract with 90 days’ notice.  “We expect to enter into additional similar services contracts,” the filing stated. The move has given xAI a hybrid stance in the AI market. Most players either build data centers for themselves or build data centers for others to use — rarely both simultaneously. This emerging model, sometimes called a “neocloud,” lets AI companies offset infrastructure costs by acting as a cloud provider when their own usage falls short of capacity. SpaceX argues the arrangement is a savvy use of resources. “We believe our dual monetization strategy provides multiple pathways to generate returns on invested capital,” it wrote. But the subtext is hard to miss: xAI appears to have overbuilt its compute capacity and needed to find a way to monetize it ahead of a public offering. Usage of Grok — xAI’s flagship AI assistant — has dropped significantly in recent months, freeing up servers that the company is now selling to one of its closest competitors. Topics AI , Anthropic , colossus , data centers , SpaceX , xAI May 27 Athens, Greece StrictlyVC Athens is up next. Hear unfiltered insights straight from Europe’s tech leaders and connect with the people shaping what’s ahead. Lock in your spot before it’s gone. REGISTER NOW Newsletters See More Subscribe for the industry’s biggest tech news TechCrunch Daily News Every weekday and Sunday, you can get the best of TechCrunch’s coverage. TechCrunch Mobility TechCrunch Mobility is your destination for transportation news and insight. Startups Weekly Startups are the core of TechCrunch, so get our best coverage delivered weekly. StrictlyVC Provides movers and shakers with the info they need to start their day. No newsletters selected. Subscribe By submitting your email, you agree to our Terms and Privacy Notice . Related AI OpenAI co-founder Andrej Karpathy joins Anthropic’s pre-training team Rebecca Bellan Lorenzo Franceschi-Bicchierai May 19, 2026 AI SandboxAQ brings its drug discovery models to Claude — no PhD in computing required Lucas Ropek May 18, 2026 AI Anthropic has acquired the dev tools startup used by OpenAI, Google, and Cloudflare Kirsten Korosec May 18, 2026 Latest in AI AI DuckDuckGo installs are up 30% as users reject being ‘force-fed’ Google’s AI Search Rebecca Bellan 1 hour ago In Brief OpenRouter more than doubles valuation to $1.3B in a year Julie Bort 5 hours ago AI This startup is betting India’s gig economy can train the world’s robots Ivan Mehta 8 hours ago