Elon Musk’s xAI Pays $80M For Memphis Data Center Site
Artificial intelligence startup xAI has acquired a 1M SF site in Memphis, Tennessee, for a new data center to expand its high-performance computing cluster in the city.
After opening the first data center hosting its “Colossus” supercomputer in Memphis last year, Elon Musk-owned xAI announced Friday it is planning to build the project's second data center, this time in the city’s Whitehaven district. As first reported by the Daily Memphian, work on the site and electrical substation needed to support it could begin as soon as this week.
The AI firm paid close to $80M for the three–parcel site, which company executives said was chosen due to its proximity to a 781 MW Tennessee Valley Authority gas power plant that will provide at least some of the facility’s electricity, according to the Daily Memphian. The data center’s planned power consumption hasn't been disclosed, but local utility Memphis Light Gas and Water indicated that xAI requested impact studies for 260MW of capacity.
In addition to utility power, the data center plans to use Tesla-made Megapack batteries for energy storage, a feature the company claims will allow it to participate in so-called demand response, in which the facility can disconnect from the power grid when high electricity demand threatens its stability. There is also a possibility that the new data center will use on-site gas turbines as a power source.
xAI says its latest data center could host as many as 350,000 graphics processing units — the high-performance and energy-intensive chips that are the bedrock of AI computing.
The company’s first Memphis data center, built last year on the site of a former Electrolux factory in the city’s Boxtown district, houses 100,000 GPUs, although that figure may eventually double. Ultimately, xAI has stated that it intends to host 1 million GPUs in Memphis.
In addition to its pair of data centers, the AI firm also announced last month that it plans to build a massive wastewater treatment plant known as a ceramic membrane bioreactor with the intention of using Memphis’s wastewater to cool its data centers. The proposed $80M project is slated for a 13-acre site that xAI is set to acquire from the city.
