Anthropic Boosts SpaceX into the Neocloud Orbit
When you see the headlines that Anthropic has struck a deal with SpaceX, I imagine the reaction runs the full gamut from "whoa!" to "what?". But actually, this seems like it may be refreshingly straightforward. At least to start.
First and foremost, Anthropic needs compute. Like right now. Yesterday if possible. Their business has been exploding – in a good way, but also in a bad way as a result. They simply do not have the capacity to meet the current demand. They've been striking new cloud deals left and right, but a lot of those are limited and/or coming online later. Because newsflash: everyone is compute constrained.
Well, except one player.
SpaceX, thanks to their acquisition of xAI, finds itself with a shit ton of compute all of a sudden. And while xAI is obviously using some of it, they're also clearly not using as much as the combined company would hope. Thus, xAI is being rebooted. And in the meantime, they're perhaps the one place on planet Earth with capacity to spare. SpaceX may be rocket science, but this is not.
It's a situation that's so obvious that I'm annoyed I didn't realize it ahead of time. Especially because I did think about it as it related to SpaceX's deal with Cursor. Basically, Cursor was signing up to use xAI's capacity, thus making SpaceX a de-facto "neocloud". That may not be the business they wanted to be in, but it's a good business to be in at the moment! And it provides an especially good narrative if, say, you're looking to go public soon.
That excess capacity on your servers? That's not a weakness of xAI, that's an opportunity for your brand new, perhaps backed into neocloud business. And as impressive of a customer as Cursor may be,1 Anthropic may be the best customer in the world right now. Again, no one needs more compute, now.
And so you'll note that all the stories about the deal are quick to point out that not only is Anthropic getting access to "all of" (presumably available) SpaceX's compute capacity, they're getting access to it "within the month". Again, that's different from the other big deals Anthropic has been signing as of late. Yes, even the multi-billion dollar deals with long-standing partners Google and Amazon are mostly for compute to come online at a later date, this year and next. That's obviously because those companies, as big as they may be are also compute constrained when it comes to AI! So Anthropic was left trying to scrounge up capacity here and there amongst the smaller neoclouds and perhaps in the crevices of the Big Tech clouds.
With SpaceX, Anthropic is getting basically immediate access to "more than 300 megawatts of compute" and "over 220,000 NVIDIA GPUs" – which every single press release cites very specifically.2 Including, naturally, NVIDIA itself, which is taking a victory lap here over Google's TPUs and Amazon's Trainium chips.
So, Anthropic gets their compute immediately – which means they can raise the limits on their paying customers immediately – and SpaceX gets their excess capacity utilized immediately – which is immediately great narratively for an IPO roadshow. Easy. Win motherfuckin win.
But wait, there's more.
Clearly it's also no accident that all of the stories, including both releases, mention Anthropic's interest in leveraging SpaceX's "orbital" compute capacity going forward. Yes, data centers in space!
I'm going to go ahead and guess that one of Elon Musk's conditions for the deal was that Anthropic sign up for – or at least sign up to talk up – the notion of such usage in the future. Why? Again, the IPO narrative. This is one of the – if not the – big growth story for SpaceX + xAI going forward. Data centers in Tennessee?
Come on. Think bigger. Think higher.
Given that every other AI company is now talking up this possibility as well – even if we're a decade away from viability, if not more – you have to imagine Anthropic was fine to tout this as well. Remember, they're likely going public too at some point soon!
Less easy to swallow may have been the notion of working with Musk. The last time we saw these two mentioned together, Musk was calling his new partner "Misanthropic". One imagines there was no love lost going the other way as well. That said, both happen to very publicly share a common enemy in Sam Altman, as both also previously were key people at OpenAI before they left to found their own AI startups. So yes, it's a very "enemy of my enemy" situation, it seems.
But again, the far more pressing matter was the need of each company.3 And the very obvious way in which they could and would come together to fill those gaps. Anthropic is suddenly a lot closer to fully operational. And SpaceX is now ready for IPO launch.
3... 2... 1...
1 Obviously worth thinking about if this Anthropic deal alters the potential of a $60B Cursor purchase. I tend to think SpaceX would still want that asset as the best potential user of their capacity and because they have an insanely popular coding harness. Still, this deal may make that one slightly less likely? ↩
2 xAI's post even lets us know that Anthropic will get access to a combination of H100, H200, and GB200 chips. ↩
3 At least for now. Let's see what happens if and when they don't need each other quite so much... ↩