Anthropic's $120.5B deal with Musk's SpaceXAI revealed
What's the story
Artificial intelligence (AI) firm Anthropic has revealed a massive computing deal worth up to $120.5 billion with SpaceXAI, the SpaceX unit formerly known as xAI. The agreement was disclosed in Anthropic's long-awaited initial public offering (IPO) filing. It covers the computing capacity needed to run Anthropic's Claude AI chatbot, using NVIDIA chips provided through SpaceXAI's data center infrastructure.
Financial implications
Monthly payments to exceed $3.1 billion
Previously, Anthropic was paying $1.25 billion a month for capacity at a Memphis, Tennessee, data center.
The total value of the agreement was initially reported as $84.5 billion in an earlier confidential draft before increasing to $120.5 billion in the public version.
Once all contracted capacity is available by December, Anthropic expects its monthly payments to SpaceXAI could exceed $3.1 billion, over half of its monthly revenue from last quarter, which stood at an average of $5.6 billion per month.
Contractual concerns
Potential risks and dependencies in the deal
The Anthropic-SpaceXAI agreement can be terminated by either party with a 90-day notice after specified lock-in periods end in January and March 2027.
This arrangement creates a potential dependency between the companies, given that SpaceXAI is affiliated with Elon Musk, whose Grok chatbot competes with Anthropic's Claude.
The filing also notes that some of Anthropic's computing suppliers develop their own AI models, highlighting risks from its reliance on external providers.
Revenue goals
SpaceX's ambitious revenue target and market demand for computing resources
SpaceX's CFO has reportedly set a target of $100 billion in annual revenue by the end of 2026. Anthropic's expected computing payments would be a major source of revenue for the business.
The deal comes amid growing demand for computing resources as companies develop and operate increasingly advanced AI models, with major providers securing capacity to develop and deploy their models.