The Albany Gazette - Musk's SpaceX strikes data center deal with Anthropic

Under the deal, Anthropic will use all of the compute capacity at SpaceX's Colossus 1 data center in Memphis, Tennessee -- a facility originally built to power Musk's rival AI venture, xAI.

The agreement gives Anthropic access to more than 300 megawatts of capacity, backed by over 220,000 Nvidia AI chips, within one month.

The company said the additional capacity would directly benefit subscribers to its Claude Pro and Claude Max plans.

Anthropic also announced it was immediately letting users do more with its technology.

The company said it was doubling the amount of Claude Code -- an AI-powered coding assistant that can write, edit, and debug software -- that paying subscribers can use in a five-hour window and eliminating restrictions that had previously cut access during busy periods.

The SpaceX deal marks a surprising partnership between two companies whose leaders have been publicly at odds.

Musk wrote in February that Anthropic "hates Western Civilization" and questioned whether there was a "more hypocritical company than Anthropic."

Anthropic CEO Dario Amodei has rankled Musk and other Silicon Valley insiders with his public warnings about the dangers of AI.

Amodei has also clashed with the Trump administration after the Pentagon designated Anthropic a supply chain risk earlier this year, a move Anthropic said amounted to unconstitutional retaliation for the company's advocacy on AI safety.

But on Wednesday Musk changed his tone, writing on X that he had spent time with senior Anthropic staff over the past week and was "impressed."

"Everyone I met was highly competent and cared a great deal about doing the right thing," he wrote.

In a separate post, Musk said he was "dissolving" xAI as a standalone company. "It will just be SpaceXAI, the AI products from SpaceX," he added, without elaborating.

SpaceX merged with xAI earlier this year in a deal valuing the two companies at $1.25 trillion. The company is widely expected to pursue an IPO this year that could be among the largest in corporate history.

The Colossus facility in Memphis has been a source of controversy.

xAI installed dozens of natural gas-burning turbines to power the site, claiming no federal permit was required because they were only for temporary use -- a move that drew persistent protests from civil rights groups who said it worsened air pollution in the Memphis area.

The SpaceX pact is the latest in a string of major compute agreements Anthropic has announced in recent months as the company looks to secure the computing power needed to meet its growing needs.

These include megadeals with Amazon, Google and Broadcom, Microsoft and Nvidia, and an infrastructure investment with Fluidstack.

- AI battle -

The announcement comes as Anthropic and OpenAI -- crosstown rivals in San Francisco -- are locked in a direct battle to equip businesses with AI agents: semi-autonomous assistants capable of writing code, analyzing large volumes of documents, or processing medical records, whose adoption is accelerating rapidly.

On Tuesday, Anthropic unveiled 10 AI agents tailored specifically for banks, insurers, and asset managers -- tools capable of drafting sales presentations, conducting regulatory checks, and analyzing financial statements.

OpenAI, meanwhile, announced a partnership Tuesday with global auditing giant PwC to support its financial operations.

But the race to deploy AI agents is running headlong into a scramble for the chips and energy needed to power them.

Data center construction in the United States, despite moving at an accelerated pace, has struggled to keep up.

And the energy-hungry projects, blamed for driving up household electricity bills, are drawing growing opposition from American citizens -- an issue that could weigh on November's midterm elections.

(D.Lewis--TAG)