SpaceX has reportedly leased its Colossus 1 data center in Memphis, Tennessee, to Anthropic PBC after internal technical issues disrupted its use for artificial intelligence workloads. The development comes on the same day SpaceX made its Nasdaq debut, with shares opening at around $150 and surging as much as 30% in early trading, briefly pushing its market value above $2.2 trillion. The stock ended its first trading session up 19%. SpaceX had originally planned to train advanced AI models using a connected cluster of three data center campuses, but hardware mismatches and latency issues led the company to monetize unused capacity through computing deals while continuing its AI buildout strategy.
Hardware Mismatch Creates Performance Bottlenecks at Colossus 1
Colossus 1 faced latency issues when linked with other facilities located more than 10 miles away, according to Bloomberg. Older networking infrastructure added to the challenge, making it difficult to support the fast synchronization required for large-scale AI training workloads.
The situation was further complicated by mixed hardware inside Colossus 1, which includes multiple generations of Nvidia chips such as Hopper and Blackwell systems, along with older accelerators. Colossus 2 and 3 were built more uniformly around Blackwell chips, creating a mismatch that slowed overall cluster performance. In distributed AI systems, slower nodes can bottleneck faster ones, limiting total efficiency.
Anthropic Agrees to Pay $1.25 Billion Monthly Through May 2029
In May, Anthropic announced that it struck a deal with SpaceX to use the full compute capacity of the Colossus 1 data center in Memphis. As part of the agreement, Anthropic gained access to more than 300 megawatts of compute capacity and also expressed interest in working with SpaceX to explore developing multiple gigawatts of compute capacity in space.
Under the deal, Anthropic agreed to pay $1.25 billion per month through May 2029 for compute access across SpaceX's Colossus and Colossus II facilities, amounting to roughly $45 billion over three years.
The agreement came after Musk, who merged SpaceX with his competing AI startup xAI earlier this year, had repeatedly criticized Anthropic prior to the deal, pointing to its clashes with the U.S. government.
SpaceX Leases Colossus 1 While Retaining Reclaim Rights
Instead of continuing to operate under these constraints, SpaceX opted to lease out Colossus 1 capacity, turning unused computing power into a revenue stream. The facility has been leased to Anthropic, while SpaceX continues to pursue external computing partnerships, including with Google. The company also retains the option to reclaim capacity if internal demand increases, stated the Bloomberg report.
SpaceX leadership has said internal AI development efforts, including Grok-related work, remain ongoing. Musk has also said SpaceX retains the right to end its computing deal with Anthropic early, provided it gives advance notice. "If compute gets super tight, I said we might need it back at some point," he said, reported CNBC.
FAQ
What technical issues led SpaceX to lease Colossus 1 to Anthropic?
Colossus 1 faced latency issues when linked with other facilities located more than 10 miles away, and older networking infrastructure made it difficult to support fast synchronization required for large-scale AI training workloads. The facility also contained mixed hardware including multiple generations of Nvidia chips such as Hopper and Blackwell systems along with older accelerators, creating a mismatch that slowed overall cluster performance.
How much is Anthropic paying SpaceX for compute access?
Under the deal announced in May, Anthropic agreed to pay $1.25 billion per month through May 2029 for compute access across SpaceX's Colossus and Colossus II facilities, amounting to roughly $45 billion over three years. The agreement provides Anthropic access to more than 300 megawatts of compute capacity.
Can SpaceX reclaim the Colossus 1 capacity from Anthropic?
SpaceX retains the option to reclaim capacity if internal demand increases. Musk has said SpaceX retains the right to end its computing deal with Anthropic early, provided it gives advance notice, stating "If compute gets super tight, I said we might need it back at some point."
