Elon Musk’s artificial intelligence startup, xAI, announced it will invest more than $20 billion to build a new data center in Southaven, Mississippi, Governor Tate Reeves revealed on Thursday, according to Reuters.

The investment comes as demand for generative AI drives the need for increased computing power. Interest in data centers grew last year as tech companies and AI firms reported billions in spending to expand infrastructure.

xAI’s latest expansion shows the company’s push to compete with industry leaders, including OpenAI’s ChatGPT and Anthropic’s Claude. The company aims to train more advanced AI models.

The startup expects the Southaven data center to begin operations in February 2026, Reuters reported, citing the governor. Elon Musk had announced the purchase of the facility, called “MACROHARDRR,” on December 30. At that time, he said the center would increase xAI’s compute power to 2GW.

The data center is located near xAI’s newly acquired power plant site in Southaven and its existing facility in Memphis, Tennessee, the statement revealed. Memphis houses xAI’s supercomputer cluster, Colossus, described as one of the largest in the world.

Reuters also reported that xAI spent $7.8 billion in cash during the first nine months of the year. AI startups often invest heavily in advanced data center hardware, and xAI’s spending reflects this trend.

Related post

View all