$119 Billion Chip Factory and Data Center Sale to Anthropic—The Full Picture of the "Musk-Style Neo-Cloud" Drawn by SpaceX and xAI
Musk's SpaceX and xAI made two major moves in the same week. One is the revelation of plans for "Terafab," an in-house chip manufacturing plant in Texas with an investment of up to $119 billion. The other is a "surprise partnership" in which xAI is selling the entire compute capacity of its Colossus 1 data center (300MW) to Anthropic.
Combining these two points, a hypothesis emerges that xAI is shifting away from being merely an AI model company toward becoming a "neo-cloud" that produces and sells compute. With the SpaceX IPO scheduled for June, how investors interpret this structural change is the core issue.
1. Terafab—A $119 Billion In-House Chip Manufacturing Plant
1-1. Overview of the Plan
According to a proposal posted on the Grimes County, Texas, website, SpaceX has outlined plans to build a "multi-phase, next-generation, vertically integrated semiconductor manufacturing and advanced computing production facility" in the area. The scale is estimated at $55 billion in the initial phase, potentially reaching $119 billion in the end.
Named "Terafab," this facility aims to manufacture chips for AI servers, satellites, the space data centers envisioned by SpaceX, autonomous Tesla vehicles, and robots.
1-2. Why Make Chips In-House?
Musk stated, "We either build Terafab or we don't have chips. We need chips, so we will build Terafab." Behind these words lies a desire to break free from dependence on external chip suppliers, including NVIDIA.
For Musk's group of companies, which pursue both AI and autonomous robotics, the calculation is that NVIDIA's production capacity "cannot keep up." He is attempting to apply the same "Gigafactory strategy" used by Tesla to manufacture batteries in-house rather than relying on Panasonic to the realm of chips.
1-3. The Intel-Tesla-SpaceX Triangle
It has also been reported that Intel will participate in Terafab. As part of its IDM 2.0 (foundry business) strategy, Intel is rushing to develop a customer base different from that of TSMC. The structure where Intel handles the manufacturing side for the massive demand of Musk's ecosystem makes sense for both parties.
However, Musk has also stated that "Grimes County is just one of several potential sites," suggesting that a final decision may still take some time.
2. Sale of Colossus 1 to Anthropic—Is xAI a Neo-Cloud?
2-1. What Happened?
xAI and Anthropic announced a "surprise partnership." The deal involves Anthropic purchasing the entire compute capacity of xAI's Colossus 1 data center (equivalent to 300MW). This transaction allows Anthropic to immediately increase its usage limits.
The explanation from xAI is simple: "We have already migrated training to a new data center called Colossus 2, and we no longer need to use Colossus 1." Selling unused compute to a competitor is an unusual decision for a major tech company.
2-2. The Significance of Choosing the "Road Not Taken"
This decision stands out when contrasted with other major tech companies.
Google's Sundar Pichai admitted on an earnings call that "Google Cloud revenue was lower than it could have been due to capacity constraints." Faced with the choice of renting out GPUs or using them for in-house AI development, Google chose "in-house AI development."
Meta took a more extreme approach, building an entirely new cloud infrastructure (Meta Compute) to resolve the GPU shortage. Zuckerberg stated, "The design, investment, and partnerships toward building this infrastructure will become a strategic advantage."
The term "strategic" implies that compute power is not just for meeting today's AI demand, but also a resource for building tomorrow's products. Neither Google nor Meta would sell their compute to rivals.
xAI has chosen the opposite path.
2-3. Positioning as a Neo-Cloud
Rather than hoarding compute for in-house product development, monetizing it by selling to Anthropic means positioning xAI as a "neo-cloud" (a business that buys GPUs from NVIDIA and rents them out to customers).
Looking at the valuations of currently active neo-clouds, CoreWeave, which has a similar scale of compute power, has a market capitalization of less than $70 billion. xAI's valuation as of January was $230 billion—more than three times that of CoreWeave. The economics of a neo-cloud are a "difficult business caught between the chip supplier (NVIDIA) and the volatility cycle of demand," and the current valuation of xAI may not yet fully account for that harsh reality.
2-4. The Irony of the Relationship Between Grok and Anthropic
There is another context. Reports suggest that Grok's user numbers have been stagnant since the beginning of 2026. It is an ironic situation where, with insufficient Grok usage to keep Colossus 1 running, a competitor in the AI model space, Anthropic, is using that compute to acquire users.
In the short term, this brings a significant boost to xAI's balance sheet, but in the long term, it creates a dilemma of "growing one's own model while providing compute to rivals."
3. The "Third Axis": Space Data Centers
The space data center envisioned by the combined entity of SpaceX and xAI can be understood in the same context as Terafab and the sale of compute to Anthropic.
Space data centers are reportedly targeted for realization around 2035, and it is an ambitious plan to change the cost structure of energy, cooling, and physical infrastructure by combining ground-based data centers with "data centers in the sky." Some analysts suggest that the sale of Colossus to Anthropic serves as material to increase investor confidence that "space data centers might actually work"—because the track record of selling compute on the ground serves as a precedent for the space version.
4. The SpaceX IPO Variable—How Will It Affect Valuation?
4-1. The Basis for the $1.75 Trillion IPO Valuation
SpaceX's IPO valuation is reported to be as high as $1.75 trillion. This figure includes the value after the merger with xAI.
How to value the components—Terafab ($119 billion investment plan), Colossus (ground data center), orbital data center plans, and the partnership with Anthropic—will be the biggest debate at the time of the IPO.
4-2. Valuing as a Neo-Cloud or a Model Company?
If the market values xAI as an "AI model company (similar to OpenAI)," a high multiple could be justified. However, if the sale of compute to Anthropic is read as a "shift to a neo-cloud," a valuation axis like CoreWeave's will be applied.
The final IPO valuation could change significantly depending on which of these two valuation frameworks is adopted.
4-3. The Fading "Software Ambition"
At the all-hands meeting in February, xAI showed long-term software ambitions such as coding (also hinting at a partnership with Cursor) and digital twins (the "Macrohard" project). However, as long as they continue to sell massive amounts of compute to competitors, the question remains whether resources for these long-term projects can be secured.
