3 weeks ago
Anthropic builds own chips amid $40 billion xAI compute deal
Anthropic makes Claude, a very smart computer assistant.
Claude needs powerful computer chips to think and answer questions.
Until now, Anthropic rented chips from other companies.
Renting those chips costs a lot of money.
So Anthropic decided to try making its own chips.
It is hiring engineers who could earn as much as $485,000 a year.
Making a new chip is very hard and takes many years.
Other big companies like Google and Amazon already make their own chips.
Anthropic also made a deal to pay Elon Musk's company more than $40 billion to use its computers.
Even after making its own chips, Anthropic will still use chips from other companies too.
Anthropic confirmed on August 5 that it is assembling an in-house silicon team to design custom chips for its Claude models.
The company is recruiting semiconductor engineers with advertised salaries reaching $485,000.
Anthropic says it will continue using chips from AWS, Google, Nvidia and AMD under a multi-chip strategy, with its own silicon as an additional option.
Anthropic agreed to pay xAI roughly $1.25 billion a month through May 2029 for exclusive use of the Colossus 1 data centre in Memphis.
Anthropic joins Google, Amazon, Microsoft, Meta and OpenAI, which already have or are developing custom AI chips.
- Who
- Anthropic, the AI company behind the Claude models, which made the announcement; Elon Musk's xAI is the counterparty in the related compute deal.
- What
- Anthropic confirmed it is building an in-house silicon team to design custom chips for Claude, aiming for faster and more cost-effective performance while keeping a multi-chip strategy with AWS, Google, Nvidia and AMD.
- Where
- The announcement location is not specified; the xAI deal covers the Colossus 1 data centre in Memphis.
- When
- Confirmed on August 5; the xAI compute agreement was struck earlier this year.
- Why
- To reduce compute costs and gain control over the hardware its models run on instead of paying chip vendors' margins at scale.
Supporters of in-house silicon
Skeptics of in-house silicon
Custom silicon strategy
Supporters of in-house silicon
Designing chips around Claude's specific computational patterns would make models run faster and more cost-effectively, and would let Anthropic control its compute costs and capabilities instead of paying chip vendors' margins at scale.
Skeptics of in-house silicon
Building a competitive AI accelerator is among the hardest engineering problems, requiring years, enormous capital and scarce foundry capacity; Anthropic is starting late, faces Nvidia's dominant CUDA software stack, and is already committed to $40 billion in rented compute while competing in an AI price war.
The xAI Colossus 1 deal
Supporters of in-house silicon
The roughly $1.25 billion-a-month deal with xAI gave Anthropic exclusive access to 220,000 Nvidia processors, solving an immediate compute capacity problem.
Skeptics of in-house silicon
The deal, worth more than $40 billion through May 2029, creates a costly dependency on infrastructure owned by a competitor whose CEO previously called Anthropic 'woke' and 'evil'; reports also describe a clause that could let the compute be reclaimed if Anthropic's models are found to harm humanity.
Key facts
- Announcement
- In-house silicon team for custom Claude chips, confirmed August 5
- Top advertised engineer salary
- $485,000
- xAI Colossus 1 deal
- About $1.25 billion per month through May 2029
- Total deal value
- More than $40 billion
- Compute resources
- 220,000 Nvidia processors drawing 300 megawatts
- Data centre location
- Memphis
- Existing chip suppliers
- AWS, Google, Nvidia and AMD
- Potential manufacturing partner
- Samsung (per The Information)
Quotes
Anthropic
Company spokesperson announcing internal silicon team
“"The company says it will continue to rely on chips from AWS, Google, Nvidia and AMD under a multi‑chip strategy, with its own silicon added as a further option rather than a replacement."”
wionews.com
“"On August 5, Anthropic confirmed it is assembling an in‑house silicon team to design custom chips for its Claude models."”
wionews.com
Sources
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