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AI May 25, 2026 · 7 tags

xAI Sold Out on Grok Users — Then Told Anthropic Their AI Better Be 'Good for Humanity'

xAI throttled its own paying customers to fund a $1.25B/month deal with its biggest rival, while Elon reserves the right to 'reclaim the compute' if their AI harms humanity. This isn't business strategy. It's a racket.

#ai#xai#grok#anthropic#compute#business#analysis

xAI Sold Out on Grok Users — Then Told Anthropic Their AI Better Be “Good for Humanity”

Let me tell you about the most cynical pivot in the history of AI companies, and it’s a strong field.

In May 2026, xAI leased its Colossus 1 data center to Anthropic — its closest competitor, the company whose product millions of people are using instead of Grok — for $1.25 billion per month, totaling roughly $45 billion over the contract’s three-year term.1

And simultaneously, xAI started throttling its own paying customers’ access to the product they paid for.

This isn’t strategy. This is a heist where the victim is holding the wallet.

The Squeeze

Let’s look at what happened on the consumer side. Starting mid-May, xAI quietly rolled out brutal rate limits across the board:

SuperGrok ($30/month): Voice sessions terminate around the 20-minute mark.2 Video generation hits a ceiling of 20 per day.3 Image edits plummeted from roughly 100 to about 30 overnight.4 Users describe being abruptly locked out, then immediately offered an upgrade.5

SuperGrok Heavy ($300/month): The top tier got throttled too. Video limit dropped from 500 to 160/day.6 xAI changed its subscription page wording from “near-unlimited usage” to “highest usage limits” — a change caught by Reddit users and confirmed in support correspondence.7

The kicker? The system charges you for failures that aren’t even yours. Failed API calls, content-filter blocks, plain errors — all deducted from your quota.8 You get punished for xAI’s own broken moderation.

And right as your tier runs out, a popup appears offering $99 for Heavy.9 The playbook is transparent: shrink what you paid for, then upsell the way back.

The Real Transaction

Now let’s look at the other side.

On May 6, Anthropic announced at Code with Claude 2026 that they’d secured all of Colossus 1’s compute — 300 megawatts, over 220,000 NVIDIA GPUs — within the month.10 The monthly price tag, as reported by TechCrunch from SpaceX’s S-1 SEC filing, is $1.25 billion through May 2029.1

xAI keeps Colossus 2 for its own work — leaving Colossus 1 entirely to Anthropic’s models.11 But Colossus 1 — the capacity that was supposed to power Grok’s future — is now running Anthropic’s models.

xAI owner Elon Musk framed the deal with characteristic performative virtue:

“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. After that, I was ok leasing Colossus 1 to Anthropic…”

Then, almost as an afterthought:

“We reserve the right to reclaim the compute if their AI engages in actions that harm humanity.”

Let me translate that. Elon Musk gets to decide — unilaterally, without oversight, without process — when Anthropic’s AI is “harming humanity” and can pull the plug on $1.25B/month of their infrastructure.

That’s not a business deal. That’s a hostage situation with better PR.

The Unspoken Truth

xAI overbuilt. The numbers don’t lie. Data from Similarweb shows Grok’s average daily active users dropped from 13.9 million to 12.2 million on mobile (a 12.5% decline) between March and April 2026 alone,12 while web visits fell from 10.5 million to 9.3 million (an 11.6% drop). Meanwhile, Claude’s daily active users jumped from 16 million to 23 million in the same period — a 44% spike.12

Grok had placed second in mobile chatbot usage in January 2026, behind ChatGPT. By April, it had dropped to fifth, surpassed by Claude, Gemini, and DeepSeek.12 Forbes reported this decline on May 5, 2026 — just days before the Anthropic deal closed.13

So xAI did the only thing a company with a massive GPU bill can do: they rented it to their competition and started squeezing their remaining users to cover the overhead. Some users had already reported persistent “high demand” and “can’t connect” errors as early as late April,14 with community members theorizing that the degradation was deliberate — a slow chokehold designed to force upgrades.

This is the “neocloud” model — a term TechCrunch used to describe xAI building data centers, keeping some capacity, and renting the rest.1 As ArsTechnica reported, SpaceX’s S-1 filing describes the arrangement as “monetizing unused compute capacity” and frames AI as a $26.5 trillion opportunity.15 The subtext is harder to miss: xAI built for a future that never arrived, and now they’re monetizing a mistake by selling to the company that beat them at it.

The Irony, Served Cold

Think about the geometry of this:

  1. Anthropic’s models are consuming xAI’s compute.
  2. xAI’s own product is suffering capacity constraints.
  3. Anthropic’s usage limits just got doubled.
  4. Grok’s usage limits just got slaughtered.
  5. The company that’s losing users is selling capacity to the company that’s winning.
  6. And the loser gets to brand the whole thing as a moral crusade.

Musk called Anthropic “Misanthropic.” They’re now running his data center. The joke wrote itself; he just forgot to read the punchline.

What This Means

For consumers, the lesson is straightforward: AI product subscriptions are not services. They’re leases on compute that can be revoked at the whim of whoever holds the infrastructure. When xAI’s own customers found out their “near-unlimited” tier was actually “highest usage limits,” they didn’t get a refund. They got a popup ad.

For the industry, this is the birth of a new risk category. Your cloud provider isn’t just infrastructure — it’s a competitor with the power to decide which of your models gets to run and which one doesn’t. And the criteria, conveniently, are written by the same person who named your rival “misanthropic.”

The AI infrastructure arms race is no longer about building better models. It’s about who controls the physical machines that run them. And right now, Elon Musk controls the machines, his rival is running the models, and Grok users are the ones getting squeezed.

That’s not a market. That’s a racket.

Sources & Attribution

All facts and data in this article are drawn from publicly available reporting. Full source citations:

Additional Reporting Sources

Footnotes

  1. TechCrunch, “Anthropic will pay xAI $1.25B per month for compute,” May 20, 2026. techcrunch.com/2026/05/20/anthropic-will-pay-xai-1-25-billion-per-month-for-compute/. Details from SpaceX S-1 SEC filing. ↩ ↩2 ↩3

  2. PiunikaWeb, “xAI severely throttling video, image, and voice features for paid Grok users,” updated May 16, 2026. Users reported voice sessions cutting off after ~20 minutes, with system upsell prompts. piunikaweb.com/2026/05/13/xai-throttles-grok-paid-users/ ↩

  3. PiunikaWeb / Reddit r/grok, “xAI severely throttling video…” Users reporting 20-video/day cap for SuperGrok. piunikaweb.com/2026/05/13/xai-throttles-grok-paid-users/; Reddit thread reddit.com/r/grok/comments/1tbpyq4 ↩

  4. Reddit r/grok, “Drop of daily limit for image edits” — user report of ~100 to ~30 edit limit overnight. reddit.com/r/grok/comments/1tb7rd0 ↩

  5. PiunikaWeb, same as 2. User screenshot of upsell prompt after voice cap triggered. ↩

  6. Reddit r/grok, “Heavy-tier subscriber mentioned daily video limit dropped from 500 to 160.” reddit.com/r/grok/comments/1tb7rd0 ↩

  7. PiunikaWeb, “Update 16/05/26” — subscription page wording change from “Near-unlimited usage” to “Highest usage limits.” Confirmed by Reddit users reddit.com/r/grok/comments/1tee75s and user-shared support emails showing the April-to-May shift. piunikaweb.com/2026/05/13/xai-throttles-grok-paid-users/ ↩

  8. PiunikaWeb, “Moderated or failed generations still count against the cap.” piunikaweb.com/2026/05/13/xai-throttles-grok-paid-users/ ↩

  9. PiunikaWeb, “$99 discounted upgrade to Heavy tier right as SuperGrok limits trigger.” piunikaweb.com/2026/05/13/xai-throttles-grok-paid-users/; Reddit thread reddit.com/r/grok/comments/1tbg7my ↩

  10. Anthropic official, “Higher usage limits for Claude and a compute deal with SpaceX,” May 6, 2026. 300MW, 220,000+ NVIDIA GPUs from Colossus 1. anthropic.com/news/higher-limits-spacex ↩

  11. Elon Musk on X, May 7, 2026 — threads on Anthropic partnership and Colossus 1 lease. twitter.com/elonmusk/status/2052069691372478511; twitter.com/elonmusk/status/2052076315306864756 ↩

  12. Forbes, “Elon Musk’s Grok Loses Users This Year As Rivals Claude, Gemini Rise,” by Conor Murray, May 5, 2026. Data from Similarweb. Mobile DAU: 13.9M → 12.2M (−12.5%); Web visits: 10.5M → 9.3M (−11.6%). Claude: 16M → 23M (+44%). forbes.com/sites/conormurray/2026/05/05/elon-musks-grok-loses-users-throughout-2026-as-rivals-rise/ ↩ ↩2 ↩3

  13. Forbes, same as 12. Published May 5, 2026 — day before Code with Claude keynote. ↩

  14. Yahoo Tech / Men’s Journal, “Grok Users Report Ongoing Connection Errors Amid High Demand,” April 24, 2026. Users reporting “high demand” errors persisting 3–5 days. tech.yahoo.com/ai/chatgpt/articles/grok-users-report-ongoing-connection-004646335.html ↩

  15. ArsTechnica, “As Grok flounders, SpaceX bets future on beating Big Tech at AI,” May 2026. Quotes the S-1 filing’s $26.5 trillion market estimate and “largest actionable total addressable market in human history” language. TechCrunch coined the term “neocloud” for this model in a May 6 analysis. arstechnica.com/ai/2026/05/as-grok-flounders-spacex-bets-future-on-beating-big-tech-at-ai/ ↩