xAI is looking more like a datacentre REIT than a frontier lab
martinalderson.com
June 8, 2026
5 min read
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64/100
Summary
xAI has formed new partnerships with Anthropic and Google, significantly increasing its operational capacity. Following its merger with SpaceX in February, revenue from these partnerships will contribute to xAI's financial performance ahead of SpaceX's IPO.
Key Takeaways
- xAI has formed partnerships with Anthropic and Google to provide significant computing capacity, with contracts worth $1.25 billion per month for 300 MW and $920 million per month for 110k GPUs, respectively.
- Anthropic faced capacity issues that led to the introduction of peak hour restrictions on their services, which have since been alleviated by the partnership with xAI.
- The agreements between xAI and its partners include cancellation clauses allowing either party to terminate with 90 days' notice after an initial lock-in period.
- xAI's Colossus 1 datacentre was built in just 122 days, showcasing its efficiency in constructing data infrastructure compared to competitors.
Community Sentiment
Positives
- xAI's monetization of their GPUs and data centers indicates a strategic move to extract value, which could lead to sustainable revenue streams.
- Grok's ability to surface specific information effectively showcases its potential utility in real-world applications despite being perceived as behind competitors.
Concerns
- The quality of xAI's LLM suggests they are not leading the frontier in AI development, raising doubts about their capabilities.
- Concerns about xAI's pivot to a data center model indicate potential tech issues, undermining confidence in their AI advancements.
