Musk's xAI Rolls Out $20B Mississippi Supercomputer Expansion Plan
Elon Musk’s xAI is promising to invest up to $20B into Southaven, Mississippi, a community of fewer than 60,000 people just across the Tennessee state line from Memphis, to help power its Colossus supercomputer.
Musk’s artificial intelligence firm is planning to build a data center in DeSoto County that will be powered by a nearby xAI-owned power plant and connect with another campus in Memphis to generate nearly 2 gigawatts of combined compute power.
The investment and its scope were announced Thursday by Mississippi Gov. Tate Reeves, who said it is the largest economic development project in the state’s history.
“This record-shattering $20 billion investment is an amazing start to what is sure to be another incredible year for economic development in Mississippi,” Reeves said in a news release.
A fact sheet released by the governor’s office says the investment in Southaven would support hundreds of permanent jobs and thousands of indirect jobs throughout northwest Mississippi. Dollar figures aren’t included, and a timeline wasn’t offered for the $20B investment commitment.
The AI firm’s most recent purchase in Southaven was of an existing building that it plans to retrofit into a data center.
Musk announced in an X post on Dec. 30 that xAI had acquired a third building to expand the Southaven campus. The post didn’t say where the property was but announced that the new data center would be called Macrohardrr. The name seems to be a dig at Microsoft, a near-antonym combination of words that Musk filed paperwork to trademark last year.
Join @xAI and help build a purely AI software company called Macrohard. It’s a tongue-in-cheek name, but the project is very real!
— Elon Musk (@elonmusk) August 22, 2025
In principle, given that software companies like Microsoft do not themselves manufacture any physical hardware, it should be possible to simulate…
The artificial intelligence firm that powers X’s Grok chatbot also announced this week that it raised an additional $20B in Series E funding that will help build out its data centers.
Musk, the world’s richest man, who purchased X for $44B in 2022 when it was still Twitter, and his tech businesses have faced scrutiny this month after a new feature from Grok allowed X users to generate thousands of explicit images per hour of women, including minors. The image generator was turned off for most users Thursday night after public outcry.
While late to the AI arms race — xAI launched in 2023 — Musk has poured tens of billions into the platform to compete with the sector’s giants like OpenAI, Microsoft and Google. XAI first launched its Colossus supercomputer in Memphis in 2024 and paid $80M for another 1M SF campus in March to expand its footprint in the city.
In July, the Silicon Valley-based tech firm picked up a 114-acre parcel that included a 640-megawatt natural gas plant across the border in nearby Southaven. By September, the firm had 200 MW of capacity up and running at the property, even as it faced pushback from some community members.
The company plans to begin data center operations in Southaven next month, according to the governor’s office. The fact sheet Reeves released includes sections on being a “good neighbor” and staying in compliance with air quality standards.
“XAI is scaling at an immeasurable pace — we are building our third massive data center in the greater Memphis area,” Musk said in a statement. “MACROHARDRR pushes our Colossus training compute to ~2GW – by far the most powerful AI system on Earth.”
