Anthropic grew 80-fold in a single quarter. Now it’s renting Elon Musk’s data center to cope
Anthropic planned for 10x growth but got 80-fold instead, now it’s renting Elon Musk’s Colossus data center just to stay afloat, exposing how even the hottest AI firms can’t build fast enough.
Anthropic’s revenue didn’t merely beat expectations in the first quarter. It exploded 80-fold on an annualized basis, reaching $30 billion, three times last year’s figure, while CEO Dario Amodei openly called the surge “just crazy” and “too hard to handle.” What the company had budgeted for was 10x growth. The gap between forecast and reality has turned into an infrastructure crisis that no amount of prior planning could contain.
Corporate customers from Uber to Netflix have flooded in, drawn by Claude Code’s agentic abilities that some prefer over Cursor. Engineers, Amodei noted, are “the ones who are fastest to adopt new technology,” a pattern he sees foreshadowing economy-wide transformation. Yet that enthusiasm has collided with reality: strict usage limits, performance regressions, and three bugs since March 4 that internal tests missed. Users reported degraded service for weeks; when first flagged in early March, Anthropic said it could not reproduce the problems. Some subscribers have already canceled, posting on X that “whatever happened in the last 1-2 months is a significant regression.”
Faced with compute shortages it could not solve internally, Anthropic struck a deal this week to rent the entire capacity of Elon Musk’s Colossus 1 data center in Memphis. The arrangement delivers immediate access to 220,000 NVIDIA GPUs and 300 megawatts of power. In return, the company is doubling five-hour rate limits across Pro, Max, Team, and Enterprise plans and eliminating peak-hour restrictions. One analyst estimated the pact could generate $3 billion to $4 billion in annual revenue for the Musk side.
The partnership carries more than technical weight. Musk has previously called Anthropic “misanthropic and evil,” and his xAI, now folded into the newly branded SpaceXAI, remains a direct competitor in the race for frontier models. SpaceXAI itself is preparing an IPO targeting $1.75 to $2 trillion. Anthropic, meanwhile, has already locked in massive future capacity: five gigawatts each from a Google-Broadcom joint project and from Amazon Web Services, the latter tied to more than $100 billion in committed spending over the next decade. Still, it turned to its rival for relief within the month.
The episode reveals the brutal mismatch at the heart of today’s AI boom. Demand is moving faster than any single company, or its supply chain, can build. Amodei says he hopes for “more normal” expansion eventually. For now, even an 80-fold runaway success has left Anthropic partially dependent on the man who once denounced it.
Whether orbital data centers, another Musk obsession that reportedly interests Anthropic, ever materialize is the next test. The sky may be the limit, but the ground-level bottlenecks are not going away.
Original reporting: Fortune.
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