Elon Musk backs Anthropic with $40B SpaceX deal

Elon Musk has publicly reversed his earlier skepticism about rival AI lab Anthropic, now calling its Mythos/Fable models the industry’s best and committing SpaceX/xAI to a $40 billion, three-year hosting deal. The agreement—signed in May 2026—secures 300 megawatts of compute capacity from xAI’s Colossus 1 data center in Memphis, Tennessee, for $1.25 billion per month through 2029. Anthropic’s compute needs are now fully met by the facility, while Google also rents SpaceX infrastructure for $920 million monthly. Musk framed the partnership as evidence that competitors can coexist peacefully, pointing to Tesla’s 2014 open-patent pledge and its Supercharger network sharing as precedents.

The move comes after Musk’s September 2025 X post dismissing Anthropic’s chances of survival, which he now calls a mistake. His latest remarks highlight a shift in tone, emphasizing admiration for Anthropic’s technical leadership—particularly Mythos 1/Fable—and pledging not to disrupt the relationship even as a rival. While Musk’s assurances carry symbolic weight, the contract itself includes financial penalties for early termination, reducing risk for Anthropic. Still, hosting infrastructure on a competitor’s systems gives SpaceX/xAI unprecedented visibility into Anthropic’s operations, raising questions about long-term competitive dynamics. The arrangement also benefits SpaceX beyond revenue: engineers gain hands-on experience with Anthropic’s scaling challenges, while proximity may inform xAI’s own model development.