GoKawiilAnthropic and xAI announced a big partnership this week, with Anthropic buying all the compute capacity at xAI’s Colossus 1 data center in Tennessee.
On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane, and I discussed what the deal might mean for xAI’s parent company SpaceX, as SpaceX prepares to go public and apparently plans to dissolve xAI as a separate organization.
Kirsten did her best to offer “a positive view” on the partnership — after all, it’s a new way for xAI to make money. But she also noted that this also suggests xAI isn’t doing much when it comes to training its own frontier AI models, and it’s harder for the company to position itself as a “forward-looking, innovative” business when that’s the case.
Then Sean asked: “Why be positive when you can be cynical?” In his view, this seems like “a major heat check before the IPO.” Yes, becoming a neocloud might be “a more believable business in the near term,” but it’s less likely to get outside investors excited in the long term. (And then there’s the environmental lawsuit that xAI is facing over Colossus 1.)
Keep reading for a preview of our conversation, edited for length and clarity.
Sean O’Kane: I always love a surprise, especially when everybody’s eyes [are] on another ball, a major trial that’s happening. Seemingly out of nowhere this week, SpaceX and therefore its AI subsidiary xAI — which apparently no longer exists now, or is imminently not about to exist, which we can get to — struck a deal with Anthropic.
Basically, the real version of the deal is that Anthropic’s essentially taking over all of the compute at the data center known as Colossus 1 in Memphis, Tennessee, to focus on Anthropic’s more enterprise-focused AI products. There’s been a lot of reporting about how [Anthropic’s] been looking for more compute […] and it seems like an escape valve for them to be able to strike this deal and get access to all this compute.
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