Elon Musk’s AI company, xAI, has now reportedly acquired a massive 1 million-square-foot property in Southwest Memphis, a move aimed at expanding its data center capabilities.
This new facility will support xAI’s existing operations in the area and enhance its infrastructure for AI development.
Brent Mayo, xAI’s senior site manager, emphasized that this acquisition positions the company at the forefront of AI innovation in Memphis.
Although it remains unclear whether this expansion is connected to a previously announced 522-acre lease in the same city, the company is clearly focused on increasing its hardware capacity.
Recently, xAI has made significant investments in AI technology, including the establishment of a second data center in Atlanta, which involved a hefty $700 million investment in chips and equipment.
Additionally, the company has signed a deal with Dell to purchase $5 billion worth of GPU-packed servers, indicating its commitment to scaling its operations.
xAI utilizes its data centers to train and run its AI models, known as Grok. Plans are underway to upgrade the main facility in Memphis, called Colossus, to support 1 million Nvidia GPUs, a substantial increase from the 100,000 GPUs currently in use.
However, the company’s rapid expansion has raised concerns among local residents, who fear it could strain the power grid and worsen air quality.
In response, xAI has taken steps to address these issues by providing discounted Tesla batteries to the local utility and building a water recycling plant.
To fund its infrastructure projects, xAI is reportedly discussing a $10 billion fundraising round, which could value the company at $75 billion, building on a previous funding round that reached $6 billion in late 2024.
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