Anthropic is expanding to Colossus2. Will use GB200

That's very doubtful given recent news that Colossus is running at 11% capacity and has hundreds of thousands of idle GPUs. xAI acquired too many GPUs and currently doesn't have enough customers to use them. That's why they are making compute deals with Anthropic and Cursor.

xAI is bleeding money and this compute deal with Anthropic will pay for all of xAI's capex ($25 billion) in 2 years.

Right, also Anthropic has been having difficult time getting more GPUs

That would be absolutly ludicris.

His own product is competing against anthropic.

He believes in the value of the idea of “space compute” for attracting investors to SpaceX. But the existence of the idea of “space compute” as a better way to deploy datacenters (along with everything else Musk has claimed in the past decade) should give everyone pause as to the plausibility of literally everything else he says.

We could see the first company vertically integrated from etching to chip to data center

1) The situation you described would be covered under the contract between Anthropic and xAI, and that any violation of that would be subject to financial penalties and legal proceedings. The US has a robust corporate legal system, and disputes do get resolved through the court system, although in a slow and costly manner.

The contract can stipulate a penalty at a high enough amount to discourage this behavior.

2) Output from models & intra-datacenter communications can be encrypted if customers truly cared.

3) There is no reason do this, because there are far better ways to exfiltrate data from Anthropic models. Chinese companies are already doing this at an industrial scale where they are reselling Claude tokens for 10-20% of the cost while retaining the data to train their own models. https://www.chinatalk.media/p/how-to-buy-cheap-claude-tokens...

If we look at Deepseek V4-pro, created by Deepseek who Anthropic formally accused of harvesting Claude tokens at scale, it performs the same as Claude did 6 months prior.

Bear in mind these data centers were built for X.ai to use themselves, so there would have been no reason to backdoor them. Also, this is all off-the shelf equipment: Dell & Supermicro servers with NVidia compute modules and ethernet switches.

It's already in the public domain (thanks to the OpenAI trial) that Grok distilled OpenAIs models. Listening to the data going into the models in the data centre would be very similar thing. There's some downsides (you're passively listening, not controlling the queries), and some upsides (way more data). But it only ever gets you to some percentage of the existing production model. It doesn't get you what Musk wants - an AI company capable of designing and deploying leading edge models. It gets you to fast follower status.

You could, but Grok is pretty high up there, it might not be "#1" but its definitely up there with the giants, people seem to overlook it. Gemini has a similar problem, it was #1 once, and it seems like Google isn't hell bent on chasing #1 they just want to keep iterating over time, they know they just need it to be "good enough" and they'll keep having repeat customers.

If Elon REALLY wanted to do anything like that he would be better off poaching talent from competitors, less legal hell to go through.

xAI had a lot of negotiating power here because Anthropic had ~0 comparable options and ultimately desperately needed the compute now. So, it wouldn't surprise me if data sharing was an explicit part of the agreement

Yes he could do that and I thought about this too. Very weird tbh

What prevents a data center operator from reading your chats? [FEATURE] Provide a way to select your data center #56916 https://github.com/anthropics/claude-code/issues/56916

There's accusations that the Chinese labs have done essentially that to OpenAI and Anthropic and exfiltrated their models without having DC access, so if you had DC access, yes, you could do that. If you had DC access though you could just copy the model onto an SSD.

The newer location is about 3 miles southwest of the Memphis Airport (MEM), one of the world’s largest cargo airports and the center of FedEx operations (500 take-off and landings per day most concentrated in a 6 h FedEx window with lots of engines running on ramps and that produces about 2000 tons of NOx per year).

I live about 18 miles downwind of the new Colossus sites, the airport, and lots of truck logistics sites, and a large refinery.

I definitely will be getting 2x exposure to ozone and particulates from both Colossi when they are running full bore. Plus an extra dose of ultrafine particulate with my morning fresh air.

Yes, wouldn’t it be nice to be in Nashville instead with HCA, Oracle, many insurance and financial institutions, and the joy of country music.

As an avid Opus user I am in an ethical Nimby bind. We do need almost any investments we can get in Shelby County TN. I’ll take Anthropic in preference to Grok NOx. And it will be my NOx.

I dug into this topic in some detail on my blog and it's both enraging and depressing.

https://poiesic.com/posts/pattern-recognition

Seems like selc's time would be better spent trying to close the loophole that allows for unpermitted turbine generators instead of going after one company for doing what they were allowed to do when they did it.

So for a guy that literally has a company that produces batteries and solar panels, choose to use gas turbines. So much for saving the planet.

this is why ai in space will win

Yup, and now Anthropic is complicit in the environmental damage and health problems for local residents that these data centers are causing.

But hey, number must go up, right?

So much for Dario’s ethics. He happily partners with Elon. He seems like just another power hungry monopoly seeking liar.

xAI’s turbines produce meaningful local/regional pollution (especially NOx in a vulnerable area) but represent a rounding error nationally and globally.

What's the tremendous externality of gas generators? People heat their own homes with natural gas and it's no big deal. How can a datacenter that is miles away be worse than that?

Is xAI a competitor worth worrying about?

They make good models, at times SotA (at least if you don't need coding, their last good coding model was six months ago), with lower safeguards than either Anthropic or OpenAI, and they still fail to capture meaningful market share or mind share. The name Grok is tainted by the twitter bot of the same name operated by xAI/X. Being owned by Musk lets the company appear unstable and untrustworthy in the minds of many. Their marketing game is just bad all around. They struggle to retain top talent.

Maybe their next model will be great. I doubt it will matter. I doubt xAI siphoning off Anthropic models and distilling that would matter. Model performance is not the main factor dragging down xAI

Theft of trade secrets. And so many people will have to be involved that evidence of the crime is bound to leak out.

Pretty sure models are encrypted all the way.

I would guess it's purely because Grok isn't nearly in-demand enough to produce meaningful revenue. And they want to juice the numbers for IPO

And I'm sure it's a bonus point for Musk that it goes to OpenAI's most relevant competitor

As weird as it seems I think this is Musk’s best shot at winning over Altman. He has personal vendetta.

xAI have (with some questionable ethics) managed to actually build a data centre, so they have a ton of compute but not much inference demand for their model which is second-tier.

Everyone else trying to build data centres is really struggling (turns out building physical things is not as easy as writing code, who knew).

So Anthropic have the model but they're compute starved because everyone else they've signed agreements with still mostly have piles of dirt and the GPUs are still in Nvidia's warehouse somewhere.

It's a bit of a win-win: xAI's financial numbers will be massively improved by the revenue using otherwise useless data centre capacity, Anthropic get the compute they desperately need albeit probably paying through the nose for it

Musk's goal with X.ai from the start seems to have been primarily to compete with OpenAI, and given that Grok itself isn't doing that (not even mentioned in competitive benchmark tables), and his data centers are therefore mostly sitting idle, this deal with Anthropic helps him achieve that goal by helping OpenAI's #1 competitor.

Note how the initial deal was only for the older Colossus #1 data center, and now after losing his lawsuit against OpenAI the Anthropic deal has been expanded to Colossus #2 also. Coincidence?

When did xAI have an advantage?

Elon got rid of most of the core xAI researchers recently. It looked like firings and he said something like Grok needs to be rewritten because it was fundamentally built in a bad way. My guess - Grok was not one of the top two models and had no traction beyond users on Twitter - so investing in it did not make sense. Or maybe he needs time to build a new team and rebuild Grok, and while he’s doing that, he needs revenue to make up for all the GPUs they bought.

Either way, I doubt he has any ‘real’ advantage in this game. It’s OpenAI and Anthropic, and then everyone else including the open weight models.

xAI advantage is that it's not censored, that's why people use Grok

I think they overestimated the demand for Grok, which is mostly useless, and now they have too much compute on hand.

What advantage? Has there ever been any indication they’re leading in any segment? Sure Elon has thrown a bunch of money at hardware, but to what end?

And frankly as bad as Altman is from a: if AI is really going to disrupt humanity do I want this guy in charge? Elon is 10x worse. So why would the best and the brightest ever work for him?

Bad read on the situation. xAI has too much compute and not enough customers using it. They have around half a million GPUs, some of which are stolen from Tesla, running at 11% utilization. xAI predicted more people would be using Grok, but Grok is not a SOTA model & users primarily want to use SOTA models. They have excess capacity and it makes sense to rent out GPUs to other customers while they improve their models.

Elon lost his lawsuit with openAI and knows xAI isn't on the same trajectory. Might as well try to win the bet and flip off Sam by supporting the best competition. Also they are getting a head start on AI as a commodity. I'm sure there's plenty of money to be made for those that can leverage their capital to essentially rent capacity right now. If he's not making enough off of grok, might as well cover their expenses.

It was kinda obvious when SpaceX "acquired" it. Elon rewarded xAI investors/prevented lawsuits by giving them SpaceX equity, and that was that.

FWIW, SpaceX (parent company of xAI) has an option to acquire Cursor for $60B that expires 7 days after their imminent IPO.

xAI might acquire Cursor. They are in the process of training new coding models and probably a new Grok.

Until they finish training, it makes sense to rent the excess capacity.

General AI is that scenario. The investor dream is that their horse hits general AI first, patents it (or otherwise somehow stops the competition from hitting it), and then reaps the massive benefits.

I'm not saying it's a likely scenario, but I genuinely believe a big percentage of AI investment revolves around that (or similar) scenarios.

Opus and GPT are so different there’s room for both and I wouldn’t be ignoring Gemini even if it isn’t ahem great at coding, since it’s quite obviously very good otherwise.

In the times before you also would rather have very smart people working together instead of one very smart dude alone even if he had an identical twin.

Over the past 6 months, Anthropic has made more waves as a product company than a frontier lab.

Plateau on a saturated benchmark where an asymptote to 100% is mathematically baked in?

Or plateau as in it won't solve any Millennium Prize problems within the next decade?

This might come down to when you expect plateau to happen. You could have said similar about transistor density many decades ago.

(I'm not denying it could happen next year for all we know. But we simply don't know, and from what I hear from researchers the breadth of ideas we've tried are still small)

Love the curiosity. I recommend you spend that curiosity on figuring out why both companies are in the situation they are that this deal is a win-win: Elon has provided a masterclass in public company launch and management over the last 15 years. (And in recent years done it amidst an incredibly divisive reputational environment).

Put another way - they could maybe try to do this. But it would be worth literally nothing compared to the actual benefits to SX of this deal. And add an immense amount of risk. There’s much more clever and interesting things to do.

No. Model weights are encrypted. Elon is doing this because Anthropic is desperate for compute, SpaceX needs to juice up its balance sheet before IPO, and xAI model team isn't competitive.

The model weights, sure he can "steal" them. But do what then? Serve it on the side?

Even distillation would be obvious.

And I wouldn't be surprised Anthropic is running the smaller inference models, keeping the base large model in machines they fully control/own.

SpaceX's data centre business is much more valuable than Grok, so this wouldn't make sense.

Might want to check the Anthropic parking lot, this might have already been happening.

I suppose you're also using Chinese models, who all have to be at the behest of the Communist party. China also have "horribly damaging" coal power plants. Do they acquire training data ethically? Do they censor? Be honest with yourself. Your concerns have nothing to do with ethic.

Anthropic works with Palantir, they are all but "ethical" lol.

Yes, quite a bad reputation hit for Anthropic to get in bed with Musk. Tesla lost half its marketshare in Europe because Elon is meddling in our democracy, is promoting right wing populist parties and supporting Trump in general.

I mean … they’re mostly sitting on their SpaceX stock and rubbing their hands gleefully. What do they have to keep up with?

Disclosure: former (small) SX investor.

Grok’s whole thing is being irresponsible and edgy. Can’t s ee Anthropic going for that, can’t see Grok’s customer base accepting an AI that refuses to do nonconsensual porn.

He posted that AI will kill everyone, then stopped when he started his own AI company.

He tried to steal the OpenAI charity, then started complaining about someone else stealing the OpenAI charity after he failed.

He attacks European democracies about free speech, but is a compliant little censor for Turkey, India and other non-European countries.

Anthropic is paying real cash, how is it fake revenue?

The eternal truth: money talks, bullshit walks

He talked with the Anthropic team, and his concerns lessened. It's actually a good thing to be able to change one's mind.

Musk will buy Anthropic and fix the wokeness. It was done before.