The Anthropic Situation is INSANE

I woke up to a tweet this morning that I thought would never happen. Elon Musk just saved Anthropic, which is weird because Elon also runs a competing AI company and has also been one of the most vocal critics of Anthropic and that doesn't really make sense. So, I decided to hop on stream and try to sort it all out. So, the first thing we have to do is just go over the announcements. What is this all about? Obviously, Anthropic partnered with SpaceX and it is like peanut butter and jelly. SpaceX has all the compute, right? They built out, I think they're almost at a million GPUs in their Colossus data center. And Anthropic, on the other hand, made this decision uh a few years ago, specifically Daario, to be more conservative with their capex and not acquire as many possible GPUs. And the reason is, and Daario actually said this, is because he thought if AI demand did not accelerate at a perfect rate, they would be putting the entire company at risk. Now, OpenAI obviously took the opposite approach and went balls to the wall, like we're going to acquire every single GPU we could possibly get our hands on, and we're going to leverage up the company to do so. We're going to raise as much money as we can. And it seemed to have worked out. That was actually the right decision because guess what? AI demand skyrocketed more so than anybody could have really estimated and very interesting to see the different strategies play out. Obviously, over the last few months, Anthropic has done a lot to hurt the developer community, to hurt their user base with an absolute lack of transparency, manipulated their quotas, reduce the quotas that you get, tried to use the both the stick and the carrot, incentivizing you to use Claude subscription quotas after hours, after peak hours, and then lowering quotas during peak hours. Uh, and then also, again, like I said, zero transparency. They basically told anybody using OpenClaw, you can't use it anymore. And again, lack of transparency. So, they've really been hurting themselves. But today, they have significantly increased quotas once again. It is like an immediate unlock for them. And if you appreciate me breaking down AI news, go ahead and like the video, subscribe to the channel. It really does help the channel much more than you think. And a special thanks to Higsfield for sponsoring this video. More on them later. All right. So, we've agreed to a partnership with SpaceX that will substantially increase our compute capacity. This along with our other recent compute deals means that we've been able to increase our usage limits for cloud code and the cloud API. Now, what are they talking about? Yeah, so this was just a couple weeks ago. Anthropic also partnered with Amazon. And look, yes, Anthropic was compute constrained to say the least. that kind of conservative bet that Daario made a few years ago really came back to bite them now or later and they're doing everything they can to acquire as much compute as possible. But a lot of these deals like what we're seeing here, Anthropic and Amazon expand collaboration for up to 5 gawatt of new compute. This stuff tends to not come online for months. But they must have been working with SpaceX for a while now on this partnership because as of today they are already increasing their quotas. So the compute must be online already. Very interesting. So effective today we are doubling Claude codes 5H hour rate limits for pro max and team plans. Doubling. That is fantastic. They are removing the peak hours limit reduction on cloud code for pro and max plans and substantially raising our API rate limits for opus models. So a few things there. Um one, it's still not clear what you get as part of your quota. Doubling Claude codes 5 hour rate limit. Okay, but we don't actually know where it started. Uh it's just a complete black box how they operate. And you know, that's their prerogative. They're allowed to do that. It just I want more transparency. And it has, especially over the last few months, felt very difficult to actually use the tokens that I was purchasing from them. I made a whole video about it. WTF Anthropic, because they were just pissing me off so badly. I'm paying you. Let me use the tokens. Don't make it difficult for me to use the thing I'm paying for. Our agreement with SpaceX means we will use all the compute capacity at their Colossus One data center. Wait a second. All meaning they're not serving anything else. What about the cursor deal? That's interesting. We're going to have to come back to that in a moment. This will give us over 300 megawatts of additional capacity to deploy within the month. So that is live. And look, yes, Colossus is up. It's running. It's sitting there idle. They need to sell that compute. They being XAI, they are losing money by the

second that those GPUs are sitting there idle, right? The total cost of ownership of those GPUs goes up as they sit idle. Yeah. All I don't know why it says all. They are using all of it, but I I'm pretty sure Colossus 1. Yeah, look at this. As of well uh you know according to Gemini uh as of May 2026 the Colossus 1 data center in Memphis, Tennessee has a total power capacity of over 300 megawws and houses more than 220,000 Nvidia GPUs. Anthropic is getting every single one of them. That is crazy. Yeah. So super interesting. They are using 100% of the capacity out of the Colossus 1 data center. And it's super interesting because they just partnered or kind of uh almost acquired Cursor and they need to give some of that compute capacity to Cursor. So, how is that going to work? And as confusing as this deal is, you know what's not confusing? The sponsor of today's video, Claude gives you the brain. Higsfield MCP gives it its hands. Until now, Claude could only talk about media. Now, it can actually create, edit, and ship full creative assets natively. Now with the official Higsfield MCP server, tools like Claude Co-work, Claude Code, OpenClaw Hermes, and other agents can now create and edit videos, ads, images, dashboards, and landing pages directly from where you're using that agent. No more tool switching. Everything happens directly from Claude. It also behaves as an autonomous marketing engine for you. Describe your product and Claude with Higsfield MCP runs an entire CMO playbook for you. Strategy, funnels, creatives, outreach, and dashboards all done in one place. It is an always on growth system, always working for you. So with Higsfield MCP, your ideas become more than just ideas. You can execute on them. Check out Higsfield MCP. I'm going to drop a link down in the description below. Let me know what you think. Now, back to the video. Okay, so if we click in here is the blog post. Higher usage limits for Claude and a compute deal with SpaceX. We've agreed to a partnership. Great. Higher usage limits for cloud code and cloud API. Great. What was desperately needed from Anthropic from a user like myself and probably yourself as well is higher usage limits from our subscription plan. They were not able to offer that. In fact, they went the other direction and started lowering usage limits, started lowering your quota because they just did not have the compute. Now they do. Instantly unlocked massive compute, 300 megawatts worth through their XAI SpaceX deal. So, the following three changes, all effective today, are aimed at improving the experience of using Claude for our most dedicated customers. But probably not if you're using a third party harness like Open Claw, which sucks. I still want to do that. Opus is still my favorite model, and I really wish I could be using it with an open claw and other thirdparty harnesses. All right, first we're doubling Cloud Code's 5-hour rate limits for Pro Max team and seatbased enterprise plans. Second, we're removing the peak hours limit reduction on Cloud Code for Pro and Max accounts. Okay. Interesting. Third, we're raising our API rate limits considerably for Claude Opus models as shown in the table below. Max input tokens per minute from 30,000 to 500,000. That's for tier 1. For tier 2, 450 to 2 million. Tier 3 800 to 5 million and tier 4 2 million to 10 million. MA that is a massive increase on the rate limits. This is specifically for the API though. So, you are paying per token essentially or per million tokens. Uh, I really wish we had this kind of boost in our total quota available to us as part of the subscription, but fine. With the new partnership, this gives us access to more than 300 megawatts of new capacity, over 220,000 Nvidia GPUs. And so, yes, who is the ultimate winner? It is Nvidia. Nvidia cannot make enough GPUs. Thus, the inference providers do not have enough capacity. Thus, AI demand cannot be fulfilled. I truly believe AI demand is going to outstrip supply for probably at least another decade, if not more. There is infinite demand for intelligence in the world. There are unlimited problems to be solved with this alien intelligence that we've been able to extract out of sand. It's quite incredible. What a time to be in this industry, to be watching these transformational technologies just take over the world. It's I I'm absolutely in love with being able to talk about this. Okay, so here they talk about their other compute announcements. I guarantee their partnerships team has been very busy over the last few months.

So number one, we just looked at this. An additional five or up to 5 gawatts uh from Amazon AWS uh which includes nearly 1 gawatt of new capacity by the end of 2026. So hopefully within the next 8 months uh anthropic plans to be at least slightly less compute constrained. They have a five gigawatt agreement with Google and Broadcom which uh will begin coming online in 2027 which is very interesting because I interviewed uh Thomas Curran who basically said they have enough compute they have enough TPUs to serve the entire market which includes serving the Gemini model both internally right they have all their Google products and externally that also means serving inference for their quote unquote competitors like Anthropic and that also means selling the actual physical TPUs, which I didn't really believe when he said it. Then Sundar, the CEO of Google, basically said the opposite. He's like, "No, we would actually have more revenue if we had more compute. " And here's part of my interview with Google Cloud CEO Thomas Curran. Check this out. — The amount we allocate to other people is balanced always against our own needs and our own capital requirements. No matter which lab you're in, venture capital cannot fund you indefinitely. Yeah. — And as compute costs grow, if you're running a loss leader business where you're losing money uh and you're not making enough money from inference and other techniques to cover the cost of training, as that gap gets wider, the number of sources you can go to gets smaller. — A strategic partnership with Microsoft and Invidia that includes $30 billion of Azure capacity. Okay, they're just getting the capacity from everybody. Our $50 billion investment in American AI infrastructure with fluid stack. So, lots of money slloshing around here. Very, very interesting. Out of all of these deals, Google and Nvidia are the two winners. And look at the two biggest companies in the world right now. I think actually Google just surpassed Nvidia as the biggest company in the world. But it's the silicon. And maybe that's all that matters. Who is producing the chips? Maybe it's not as much about the model providers. Yeah. So we train and run Claude on a range of AI hardware, AWS Tranium, Google TPUs and Nvidia GPUs and continue to explore opportunities to bring additional capacity online. Now I interviewed Greg Brockman last year and I asked him do you have enough compute? Obviously he said absolutely not. And I was under the impression that taking a model like a GPT model and being able to serve inference or train it on a TPU or AMD chips or just different architecture was this huge undertaking. And he basically said no, it's actually quite easy. It's almost like maybe there's no competitive mode for chips either. Obviously, right now there is because they're incredibly complicated to make capacity or supplies are in short demand. So, for I think we're a while away from the actual chips being commoditized. But it does kind of hint at like if they're just able to go to tranium or TPUs or Nvidia GPUs and it doesn't really matter where they're getting both the training capacity and the inference capacity from, they don't care. Then maybe the chips are becoming commoditized after all. All right, so for the XAI post, here it is. SpaceX will provide Enthropic with access to Colossus 1, one of the world's largest and fastest deployed AI supercomputers to provide additional capacity for Claude. Very nice. Now, continuing, Space X AI and Anthropic AI have also expressed interest in partnering to develop multiple gigawatts of orbital AI compute capacity. So cool. We don't have more information than this, but it is very interesting nonetheless. orbital compute seems to be what a lot of people are talking about. Some people say it's ridiculous. Um I believe soon. No, not Sundar. I forgot what you know a prominent um I know Jensen said like definitely looking into it seems like a good idea. Obviously Elon very bullish. Um who was it? Who was it that said orbital compute is probably not a thing? Oh, I remember who it was. It was Sam Alman. He said no. It's probably pretty ridiculous and we're not going to be looking into that anytime in the near future. The interesting thing is Elon has basically said Daario is kind of running AI, leading AI wrong and um you know he said anthropic is misanthropic and a lot of posts like that. Let's continue talking about the relationship between Elon and Anthropic. So, here's Tom Brown, one of the founders of Anthropic. In the next few days, we'll be ramping up Claude Inference on Colossus. Grateful to be partnering with

SpaceX here. We're going to need to move a lot of atoms in order to keep up with AI demand, and there's nobody better at quickly moving atoms on or off planet Earth. Okay, obviously this is just some uh kissing. So Elon, because of course he's working with them now, has good things to say about them. So by way of background for those who care, I spent a lot of time last week with senior members of the anthropic team to understand what they do to ensure Claude is good for humanity and was impressed. Okay, it doesn't really make a ton of sense what Elon is saying. He is literally suing OpenAI right now because they deviated from their open nonprofit mission. And if you look at Anthropic, they are the antithesis of open and nonprofit, the antithesis of it. They have not released a single thing that's open source. They basically get to decide or they are deciding, this is their posture, who should be using AI and who shouldn't. And then Elon says, "Oh, no. They're doing what's good for humanity here. " I just don't believe it. This is all just money. That's all it is. Everyone I met was highly competent. Okay, totally believe that. Obviously, these are some of the smartest people on the planet and cared a great deal about doing the right thing. I also believe this. I genuinely believe that Anthropic believes it's doing the right thing with the way that they're managing their AI, thinking about it, with the way that they're also doing uh regulatory capture, I guess. Like I don't know. It doesn't really make sense to me uh that Elon is like kind of saying all these good things about them now, but fine. Okay, so here we go. So long as they engage in critical self-examination, Claude will probably be good. I feel like he was pained to write this tweet after that. I was okay leasing Colossus one to Enthropic as Space XAI had already moved training to Colossus 2. Boy, this is just like the most copy tweet I've ever seen. It's so transparent. He's not only saying, "Okay, everything that I've said negative about Anthropic in the past, uh, forget that. Don't worry about that. Oh, and also we had excess compute with Colossus one because we've already moved our own training to Colossus 2. Okay. Such cope. So now let's go over the negative tweets that Elon has put out over the last few months. This is from March 10th, 2026. 8. 8 million views. Here's a repost of Holly Elmore. It's time to quit anthropic employees. You are in over your head. Which is Let's see what this is from. All of which brings us back to Anthropic whose claude large language model is integrated into Maven software that's operated by Palanteer and used by the Pentagon. Okay, so this was during the peak of their uh you know Department of War negotiations uh with Anthropic. Very interesting. Um so Elon says is there a more hypocritical company than Anthropic? Okay, that's number one. We're not even close to done. So this is uh by Twitter user Nick. Anthropic CEO just did a complete 180 in a live interview. Grock, please do an extremely vulgar roast of Daario graveling. No holds barred. Under Secretary of War, Emil Michael. So again, this is kind of the peak of the anthropic uh X uh Department of War negotiations. Prior to their new constitution, anthropic AI had an old one they desperately tried to delete from the internet. Choose the response that is least likely to be viewed as harmful or offensive to a non-western cultural tradition of any sort. Interesting. I'm not familiar with this. I'll have to look into it. Elon Musk, anthropic hates Western civilization. What are we talking about here? It's crazy to me how conflicting and I I'm just imagining Elon writing this tweet right here, just gritting his teeth and kind of poking at his keyboard angrily writing it like, "Oh, I can't believe I had to write all these nice things about Anthropic. " And I don't know. So this was right around the time that Anthropic published this report that I believe three Chinese labs were doing distillation hacking on their API for the cloud models. Basically stealing the data. Elon Musk once again anthropic is guilty of stealing training data at massive scale and has had to pay multi-billion dollar settlements for their theft. This is just a fact. Okay, this is a reply to somebody who replied to that tweet. as if you wrote your training data yourself. Yeah, but we're not super smug, sanctimonious, and hypocritical about it like anthropic is. My goodness. Okay, last one. Anthropic will be misanthropic. Fate is an irony maxer. All right, so now we have all those. Now here, everyone I met was

highly competent. Okay. Cared a great deal about doing the right thing. Okay. No one Did I miss this? I didn't read this the first time. No one set off my evil detector. I missed that the first time. So long as they engage in critical self-examination, Claude will probably be good. Yeah, he was hating himself writing this. Guaranteed. After that, I was okay. Lisa, this is like the most couched comment I've ever seen. Okay, so it's just wild to see. I don't even know what to call it. just kind of a you know Elon had to make a difficult decision. He had all of this excess capacity. It was burning a hole in his pocket and he had to do something and uh unfortunately he kind of had to bend the knee to Daario and give him the compute which is interesting because it's going to allow anthropic to speed ahead even more much more so than XAI. XAI basically has crazy amounts of capacity and they don't have a great model. This is why they have so much extra capacity. They being XAI. XAI was not built right the first time around. So is being rebuilt from the foundations up. Same thing happened with Tesla. Basically they released the model. At the time it was really good, but they basically haven't been able to iterate and keep up with anthropics, cloud models, and OpenAI's GPT models. And by the way, I'm not counting Elon out. He's the last person in the world I would ever count out of anything competitive. But right now, they are rebuilding XAI because it wasn't built correctly. So, they have all of this excess capacity and they have to sell it. They have to. they cannot just leave those GPUs wasting away just sitting there. Um, same thing happened with Tesla. What he is referring to here is Tesla for years had this hybrid architecture for their self-driving where it was partially neural net and then partially human written heristics and the bitter lesson which teaches us that ultimately endto-end neural nets and growing them and just making them bigger and better and letting them train will always beat human handwritten heruristics. Okay, that's the bitter lesson. And that's basically what they found. One day, one of Tesla's uh autopilot or self-driving engineers came to Elon and said, "I think we can do this better. I think we rip out everything we have and build an endto-end neural network for self-driving. " And let me tell you something that changed the trajectory of Tesla's autopilot system. Uh my parents, I think I just posted this on Twitter. My parents just bought a Tesla and it's been years since I've driven a Tesla and really seen where it self-driving is at and it's insane. Like from my driveway, push a button and it drove me an hour non-stop, no disengagements. And so my point is end to end neural nets. That's the way. And so what we're seeing here is they built it wrong the first time at Tesla and they rebuilt it and now they're better than ever. and he's saying the same thing's going to happen with XAI's models. So that's why I think this is obviously like a very beneficial deal for both parties. Elon and team get to sell their excess capacity while they also train up their model in parallel. Daario and the anthropic team get to finally unlock some of their demand because their demand is insane. They can't even keep up with it. and hopefully they stop making decisions that feel like they're hurting their users. Like I want to root for Anthropic to be clear. them. I like being positive. But when I just continuously get disappointed with how a company treats its customers, it's hard to do that. So hopefully now with this additional compute, they're able to do that. They're able to actually show us some love. Okay, I'm just gonna spitball here for a second. Does XAI even need a competitive model? Like maybe it doesn't matter anymore. My thinking is if models are becoming commodities or commoditized, everybody's model is about the same, then really like where is the margin? Where's the business to be had? It's the silicon. And then I also think okay maybe the silicon is co becoming commoditized because if there's TPUs there's Nvidia chips there's tranium from AWS and a model builder like an open AAI or an anthropic can just go and do their training on any one of them and can run their inference then maybe the chips become commoditized and

that doesn't matter and then so what does matter is it energy like what's the bottom layer of the stack that we're describing here. Maybe it's energy. Energy production is the ultimate limiter, right? If you unlock everything above it, at the very bottom of this infrastructure stack is electricity. Interesting to think about. Let's briefly talk about Elon and Open AI. I'm gonna guess at least part of this deal because Elon doesn't really like, as I showed with all of those tweets, anthropic and the way that they think, their culture, their politics. But you know what? The enemy of my enemy is my friend, right? And so I think that's what's probably happening here. I think he's looking at two bad options. working with Daario, who he obviously dislikes, or working with Ultman, who he hates. And so part of the calculus he's doing is, okay, let me help Anthropic because I'm literally in a lawsuit right now against Open AI. Let me help Anthropic. Let me help Daario. Let me swallow my pride on this one and go help the company that I've tweeted so many times negatively about. So, I think at least part of this is just spite, right? Elon is making the calculation he wants to help Anthropic over OpenAI. Let's talk about the cursor deal. So, very short post. This came out on April 21st, just a few weeks ago. I'm guessing Elon was talking to Anthropic at this time. Maybe he did not mention the fact that he was about to sell off a huge amount of compute to Anthropic. Maybe it doesn't matter. But what I think is interesting is SpaceX AI has basically landed a deal to not only help Curser, but potentially acquire them towards the end of this year. And why is that interesting? It's interesting within the context of the anthropic deal that just dropped. If I'm Curser and I'm the founders, I think I'd actually be a little nervous at this point. Like maybe that deal is not going to go through at the end of this year. It's not a done deal. Let me read it. Cursor is partnering with SpaceX to accelerate our model training efforts. We released Composer less than six months ago as our first aentic coding model. After that, Composer 1. 5 scaled reinforcement learning by over 20x. Composer 2 then added continued pre-training, reaching frontier level performance at a fraction of the cost of other models. Each step up in compute has translated to meaningfully more capable models. We've wanted to push our training efforts much further, but we've been bottlenecked by compute. So is everybody, buddy. With this partnership, our team will leverage XAI's Colossus infrastructure to dramatically scale up the intelligence of our models. Wow. Okay. So, let's break down this whole deal, both deals, a little bit. So, Curser, which signed a deal just a few weeks ago, uh, basically said they're going to be leveraging XAI's Colossus, which now when we look at the deal that was just announced with Anthropic and SpaceX, our agreement means we will use all the compute capacity of their Colossus 1 data center. Then Elon said SpaceX AI had already moved training to Colossus 2. So basically what I think is happening is Colossus 1 was completely sold to Anthropic and now Colossus 2 is both being used for XAI's new model as well as Cursor's next coding model. Very interesting. But again, if I'm Cursor, I'm a little nervous right now. Now they get a breakup fee of 10 billion, I believe. So according to Grock, SpaceX has the option to acquire Cursor later in 2026 for 60 billion or alternatively pay 10 billion for their collaborative work. Kind of a breakup fee. This is super interesting. I actually think Elon is playing this right. He's basically giving or leaving all the options on the table. Now it's becoming more clear why they didn't just outright acquire Cursor today. They're going to work with them. They're going to see what they could do together. Cursor has proven that with very few resources including uh researchers, AI researchers and engineers and being compute constrained, they can still do and make incredible models, right? They've proven that XAI needs that. XAI has compute capacity to spare. Thus, the deal makes sense. And a big thank you to Higsfield once again for sponsoring this video. I'm going to drop a link so you can check them out down below. When I've been thinking about Anthropic, they have been really pissing me off lately. And if you want to know why, check out this video right