Anthropic on Wednesday said it will take all the compute capacity at Elon Musk's Colossus 1 data center in Memphis, Tennessee, a deal that hands the maker of the Claude AI models more than 300 megawatts and opens the door to building data centers in orbit.
The agreement, announced at Anthropic's "Code with Claude" developer conference in San Francisco, lands as compute supply has become the binding constraint on AI growth. Hours later, Chief Executive Dario Amodei told the audience first-quarter revenue and usage grew 80-fold on an annualized basis after the company had planned for 10-fold growth. "That is the reason we have had difficulties with compute," Amodei said, adding Anthropic is "working as quickly as possible to provide more" capacity.
What shifted
Colossus 1 houses more than 220,000 of Nvidia's GPUs, according to Semafor, and is the largest facility built by xAI, the AI lab Musk merged with SpaceX this year. Musk said in a separate post on X that xAI "will be dissolved as a separate company" and renamed SpaceXAI. Anthropic said the added capacity will let Claude Pro and Claude Max subscribers consume more tokens per minute, raising usage limits for paid customers throttled during peak hours.
A reversal
The deal closes a public feud. Musk wrote in February that "Anthropic hates Western Civilization" and asked whether there was a "more hypocritical company than Anthropic." On Wednesday he said he had spent time with senior Anthropic staff over the past week and was "impressed." The agreement lands while Musk is in federal court in Oakland, Calif., where he testified for three days in his lawsuit against OpenAI and Chief Executive Sam Altman.
Space, eventually
Anthropic and SpaceX said they have "expressed interest" in jointly developing multiple gigawatts of compute in space, echoing a moonshot Alphabet announced in November. "The compute required to train and operate the next generation of these systems is outpacing what terrestrial power, land, and cooling can deliver on the timelines that matter," SpaceX said. SpaceX has cautioned in a filing that the orbital plans "are in early stages, involve technical complexity and unproven technologies, and may not achieve commercial viability."
The tie-up is the latest in a string of capacity deals for Anthropic, including a multibillion-dollar agreement with Amazon. The company is in talks with investors at a $900 billion valuation, CNBC has reported, which would put it above OpenAI. The buildout also follows JSJ's May 2 report that the Pentagon signed seven AI vendors for classified networks while leaving Anthropic out, citing the supply-chain risk designation it imposed in March; Anthropic is suing the Trump administration to reverse the decision.
The risk
The Memphis deal concentrates a growing share of Anthropic's compute with a single counterparty whose owner had spent months attacking the company, and who controls a rival model now being adopted by the Defense Department. The turbines xAI installed to power Colossus reportedly worsened air pollution around Memphis and have drawn persistent local protests, CNBC reported. Reaction from labor groups, environmental regulators and left-leaning outlets covering the Memphis dispute was not captured in today's body-tier reporting, which was drawn entirely from center-leaning sources.
Amodei said the current pace is "just crazy" and "too hard to handle," and that he hoped for "more normal" expansion ahead.