Stories
Anthropic CEO Dario Amodei turns to Elon Musk amid AI chip crunch
- •Silicon Valley AI companies face a severe shortage of computing capacity, driving up development costs and forcing unexpected corporate negotiations.
- •Anthropic co-founder Tom Brown reportedly negotiated a massive deal to lease over 300 megawatts of computing capacity linked to Elon Musk's xAI.
- •The partnership talks occurred despite public criticism from Musk on X, highlighting the extreme urgency for AI infrastructure.
- •Anthropic also approached Meta for spare capacity, though Meta ultimately declined to provide chips.
- •Google is experiencing internal friction and high-profile departures, such as Noam Shazeer, due to scarce computing resource allocations among competing research teams.
Key Questions Answered
Anthropic reached an agreement to lease more than 300 megawatts of computing capacity through a deal linked to xAI, utilizing the Colossus 1 data centre located in Memphis, Tennessee. The long-term arrangement involves payments of $1.25 billion per month through May 2029, potentially generating over $40 billion to $45 billion in total revenue for xAI.
Anthropic CEO Dario Amodei contacted Meta's chief AI officer earlier in the year to explore whether the social media group could supply spare computing capacity to help meet surging demand for its AI models. While Meta considered the possibility and engaged in talks, it ultimately declined to provide chips to Anthropic initially.
Google experienced internal friction and disagreements over how computing resources should be distributed among its research teams. Despite spending $2.7 billion in 2024 to bring back prominent researcher Noam Shazeer to lead work on projects like Gemini, the company did not guarantee the computing capacity he wanted, leading him to leave for OpenAI after resources were redirected.
