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A new deal between Anthropic and xAI has sent shockwaves through the AI industry. Earlier this month, Anthropic announced they would be purchasing 300 megawatts of compute capacity from xAI — securing the entire output of a data center near Memphis, Tennessee.
However, it soon became apparent that such vast resources are not cheap. The deal now includes paying xAI $1.25 billion per month through May 2029, with discounted rates for the initial two months as xAI ramps up its operations. This could bring xAI over $40 billion in revenue.
- This move represents a new model where AI companies can monetize unused compute capacity by acting as cloud providers when their own usage falls short of capacity.
- The deal underscores how the market is evolving, with players now considering both building and renting out data centers to maximize returns on investment.
- This arrangement also hints at xAI’s need to find alternative uses for its resources, leading it to sell unused servers to Anthropic — a company that has shown interest in this partnership.
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Originally published at techcrunch.com. Curated by AI Maestro.
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