Jan 9 (Reuters) – Elon Musk’s artificial intelligence startup xAI is investing more than $20 billion to build a data center in Southaven, Mississippi, state Governor Tate Reeves said in a statement on Thursday, as a boom in generative AI fuels demand for increased computing power.
Interest in data centers swelled last year as tech giants and AI hyperscalers planned and invested billions of dollars in spending to scale up infrastructure. xAI’s latest expansion underscores its ambitious push to compete more effectively with industry leaders OpenAI‘s ChatGPT and Anthropic’s Claude by training increasingly advanced models.
xAI expects to begin data center operations in Southaven in February 2026, the statement added.
Musk had announced the purchase of the data center, called “MACROHARDRR”, on December 30. The billionaire had said that it would take xAI’s compute power to 2GW, but did not provide investment details or its location at the time.
The data center is close to xAI’s newly acquired power plant site in Southaven and its existing data center in Memphis, Tennessee, according to the governor’s statement.
Memphis houses xAI’s supercomputer cluster known as Colossus, touted as the largest in the world.
The company has spent $7.8 billion in cash in the first nine months of the year, Bloomberg reported earlier in the day, as startups in the AI space typically burn through huge amounts of cash, with billions poured into acquiring pricey, advanced data center hardware.
(Reporting by Anusha Shah in Bengaluru)
