Musk's SpaceX strikes data center deal with Anthropic

AI startup Anthropic announced on Wednesday a major computing partnership with Elon Musk's SpaceX, gaining access to a vast data center as the Claude maker races to keep up with surging demand for its AI services.

Under the deal, Anthropic will use the full capacity of SpaceX's Colossus 1 data center in Memphis, Tennessee – a facility originally built to support Musk's AI venture, xAI.

The agreement provides more than 300 megawatts of power and over 220,000 Nvidia AI chips within a month, directly benefiting subscribers to Anthropic's 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 companies whose leaders have publicly clashed. Musk criticized Anthropic in February, claiming it "hates Western Civilization," while 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's tone shifted, praising Anthropic staff on X as "highly competent and caring a great deal about doing the right thing." He also announced that xAI will be "dissolved" into SpaceX, rebranded as SpaceXAI, without elaborating further.

The Colossus facility has faced controversy. xAI installed dozens of natural gas turbines to power the site, claiming temporary use exempted it from federal permits. Civil rights groups protested, citing worsened air pollution in the Memphis area.

The SpaceX pact is the latest in a series of major compute agreements Anthropic has announced in recent months, including deals with Amazon, Google and Broadcom, Microsoft and Nvidia, and an infrastructure investment with Fluidstack.

The announcement comes amid a heated AI race with OpenAI.

Anthropic recently launched 10 AI agents tailored for banks, insurers and asset managers, while OpenAI partnered with global auditing giant PwC to support financial operations. The rush to deploy AI agents is intensifying competition for chips and energy, as US data center construction struggles to keep up and energy-hungry projects, blamed for driving up household electricity bills, draw growing opposition from American citizens ahead of the midterm elections.

(With input from AFP)