Reed’s view
Elon Musk’s decision to sell compute power to Anthropic is an illustration of how the AI token is taking over the economy.
When Elon Musk founded xAI (now owned by SpaceX) he rightly saw how AI compute power would become a scarce and valuable resource, and built his Colossus data center at a mind-boggling pace. But in uncharacteristic fashion for Musk, xAI moved too slowly into harness engineering, which allows AI models to reach out beyond chat windows and control more operations on a computer.
Harnesses enabled an explosion in agentic AI use. Products like OpenClaw, Anthropic’s Claude Cowork, and OpenAI’s Codex app ushered in a whole new way of leveraging AI models, and meaningfully increased the amount of tokens they consumed. The technology more than surpassed Anthropic’s ability to keep up with compute and showed just how much Anthropic underestimated its own success.
But this isn’t just a story of two companies making a deal to rectify strategic mistakes. It’s a monumental example of the new form of commercialism that has taken over the AI era: A currency that can be transferred anywhere in the world at nearly the speed of light. A utility so important it’s already drawing comparisons to oil.
For example, if The Gap orders too many clothes and Uniqlo doesn’t order enough, Gap can’t just sell its clothes at Uniqlo stores. But in the AI world, the general purpose nature of AI tokens now makes that kind of trade possible.
At some point in the future, raw token production will be a low margin business. xAI will want to sell its own tools and not just the GPUs that power them. But for now, demand is growing at such a rapid pace that it almost doesn’t matter.
In this article:
Room for Disagreement
In a recent blog post, British programmer Simon Willison cites a post on X by Musk, where he writes that his company reserves the right to withdraw from the deal if Anthropic’s AI engages in activity that’s harmful to humanity. “Presumably the criteria for ‘harm humanity’ are decided by Elon himself,” Willison writes. “Sounds like a new form of supply chain risk for Anthropic to me!”
Notable
- A Goldman Sachs analysis published last month suggests roughly $7.6 trillion in capital will be deployed across compute, data centers, and power infrastructure between 2026 and 2031.