xAI Partners with Anthropic and Google for GPU Rental Business
Original: xAI is looking more like a datacentre REIT than a frontier lab
Why This Matters
Highlights the severe AI compute shortage and emergence of GPU rental as a major revenue stream
xAI has struck massive GPU rental deals with Anthropic ($1.25bn/month for 220k GPUs) and Google ($920mn/month for 110k GPUs) from its Memphis datacenter. The partnerships help address severe capacity shortages at AI companies.
xAI, now merged with SpaceX, has entered lucrative GPU rental agreements with major AI companies. Anthropic was experiencing severe capacity constraints, forcing peak-hour usage restrictions on subscribers due to high demand during overlapping US and European work hours. xAI's partnership provides access to their Colossus 1 datacenter in Memphis, allowing Anthropic to lift usage restrictions. Google followed with a similar deal. Both agreements include 90-day cancellation clauses after initial lock-in periods. If sustained for 18 months, xAI would recoup all capital expenditure while retaining hundreds of MW of GPU capacity. The deals come as datacenter construction faces delays industry-wide, while xAI demonstrates rapid deployment capabilities, having built Colossus 1 in just 122 days.