xAI sells Colossus 1 compute to Anthropic ahead of SpaceX IPO

Anthropic has taken over all compute capacity at xAI's Colossus 1 data center in Memphis, Tennessee, in a deal that signals xAI is pivoting from frontier AI model training to becoming a neocloud provider. On TechCrunch's Equity podcast, Kirsten Korosec, Sean O'Kane, and Anthony Ha discussed the implications for xAI's parent company SpaceX, which is preparing to go public and plans to dissolve xAI as a separate organization. The deal provides Anthropic with much-needed compute for its enterprise AI products, while xAI monetizes infrastructure it built for its Grok chatbot, which has struggled to gain traction outside X. Sean O'Kane characterized the move as "a major heat check before the IPO," noting that while a neocloud business may be more believable in the near term, it is less likely to excite long-term investors compared to frontier lab ambitions. The partnership also comes amid an environmental lawsuit against xAI over Colossus 1. Russell Brandom observed that most companies prioritize using their own compute for internal model training, suggesting xAI is not heavily invested in AI model development. The deal raises questions about xAI's ability to position itself as an innovative company when it is merely renting out GPUs.