Musk's xAI Building Massive Memphis Data Center Hub At Record Speed
XAI’s controversial “Colossus 2” artificial intelligence cluster in Memphis is on track to be the largest data center in the world — and a new report says Elon Musk's firm is building it out faster than any of its competitors.
In March, xAI purchased a 1M SF Memphis warehouse as the future site of its second Colossus AI training cluster in the city.
Just six months later, the site already has 200 megawatts of capacity up and running, with power resources secured to deploy more than 1 gigawatt of capacity during this quarter, according to a report from AI supply chain analytics firm SemiAnalysis.
That scale of computing power would make the Memphis facility the largest data center in the world by total computing capacity, overtaking training clusters developed by Meta and Anthropic.
At the same time, the six-month development timeline to reach 200 MW — with a gigawatt possible just three months later — represents unprecedented speed to market. By comparison, other large-scale training clusters built by firms like Oracle, Crusoe and OpenAI took around 15 months, SemiAnalysis reports.
Unmatched speed to market has become a hallmark of xAI’s infrastructure build-outs. The company’s first Memphis data center, a 300 MW facility called Colossus that is the world’s largest fully operational AI training cluster, was built in 122 days by repurposing a shuttered Electrolux factory.
XAI has employed creative means to get power to its Memphis sites quickly, although some of the firm’s tactics have drawn criticism and controversy.
In May, the Southern Environmental Law Center published aerial photographs showing the presence of 35 operational gas turbines at the Colossus site, despite xAI only being permitted to operate 15 generators on the site. The group said the extra 20 generators constitute a violation of the Clean Air Act.
“xAI has essentially built a power plant in South Memphis with no oversight, no permitting, and no regard for families living in nearby communities,” SELC senior attorney Amanda Garcia said at the time.
Environmental and civil rights groups have filed legal action against the company for what they say is its use of unpermitted on-site generation. The revelations also generated outcry from Memphis residents and some officials who claim emissions from the facility are causing debilitating air quality issues.
With rising opposition from local and state leaders to locating more gas generation in the Memphis area, Musk’s firm executed something of an end around.
In July, xAI acquired a former Duke Energy power plant just across the state line in Southaven, Mississippi, where state regulators gave xAI permission to operate gas turbines for a year with no permit.
Just 6 miles from the Colossus 2 data center, the 114-acre site has been fitted with seven operating natural gas turbines with a total generation capacity of around 245 MW, although the site could support more than a gigawatt of generation, according to SemiAnalysis.
XAI will lean heavily on gas turbine rental firms like Solaris Energy Infrastructure to scale the training cluster’s power capacity past 1 GW, SemiAnalysis reported. Total capital expenditures for Colossus 2 will likely be in the tens of billions of dollars, although xAI has yet to raise the capital needed to acquire the graphics processing units Nvidia has allocated for the cluster. Still, those GPUs are expected to be fully deployed by early next year.
XAI isn’t the only AI giant making unprecedented infrastructure investments. Microsoft announced Thursday that it is in the final stages of building what it claims to be the world’s most powerful AI data center.
The 315-acre campus in Mount Pleasant, Wisconsin, includes three data centers totaling more than 1M SF. Microsoft invested $3.3B in the facility, where it plans to deploy hundreds of thousands of the latest Nvidia GPUs.
Microsoft claims the data centers will deliver 10 times the performance of the world’s fastest supercomputer today.
