Anthropic Leases Musk's Memphis Data Center for $1.25B Monthly

Anthropic takes over Memphis supercomputer facility

Anthropic has leased Elon Musk's Colossus data centers in Memphis, Tennessee, paying an estimated $1.25 billion per month for computing power to train its Claude chatbot, according to The Christian Science Monitor. The deal marks a significant shift for the facility, which Musk originally built to power his own Grok AI assistant.

The transaction involves both Colossus 1 and Colossus 2 facilities, which SpaceX leased to Anthropic last month. Musk, who previously called the company "Mis-Anthropic," has softened his stance, stating that "so long as they engage in critical self-examination, Claude will probably be good."

The 300-megawatt processing facility was rapidly constructed by converting an old appliance factory in approximately four months. Musk installed portable natural gas generators to power the supercomputer, though these generators produce exhaust that nearby residents say threatens local air quality.

Community concerns mount in historic Boxtown

The data center sits adjacent to Boxtown, a historic African American community founded in 1863 by formerly enslaved people who built homes from decommissioned boxcars. Residents now find themselves living in the shadow of AI infrastructure, close enough to smell what they describe as acrid fumes from the facility.

State lawmaker Justin Pearson, a Boxtown local, has challenged the project since its inception. "We're being told by everybody who's just greenlighting this project like it's the best thing in the world, that this is okay for us to be mistreated," Pearson said at a community meeting.

Resident Lemoyne Payton questioned the resource allocation: "When you put all this money on that machine, you ought to either help people with their electric bill or something."

Donal Harris, director of the Marcus Orr Center for the Humanities at the University of Memphis, framed the issue more broadly: "Elon Musk gets a bad play in Memphis, but he's not the problem. It's that places like Boxtown are seen as places where you can externalize the risk and environmental degradation so that people in other places can benefit."

Why it matters

The Memphis deal illustrates how AI's explosive growth is redirecting massive resources—capital, electricity, and water—while placing environmental burdens on communities with limited political power. With nearly 1,200 new data centers opened in the U.S. over the past five years, the tension between AI advancement and local impact is becoming a defining challenge. A May Gallup poll found 71% of Americans oppose having a data center built near them, while 43% believe AI's risks outweigh its benefits.

Anthropic positions itself as responsible AI leader

Memphis Mayor Paul Young defended the arrangement in a statement on X, noting that Anthropic "describes itself as a Public Benefit Corporation with a single purpose: the responsible development of advanced AI for the long-term benefit of humanity, with accountability to the public good embedded in its corporate DNA."

The company recently delayed releasing its latest chatbot, Mythos, citing concerns that criminal enterprises could exploit it. Anthropic is expected to pursue a major initial public offering this year.

Lifelong Boxtown resident Greg Kinsey acknowledged the complexity: "There are so many questions, but not enough answers, as to what's going on. Might as well get ready for the ride. But don't blink—or you'll miss it."

These details were first reported by The Christian Science Monitor.