Elon Musk's xAI Data Center Investment

Elon Musk's xAI organization is set to invest over 20 billion dollars to build a data center in Southaven, Mississippi, announced Mississippi Governor Tate Reeves on Thursday. This investment is driven by the rapid growth in generative AI technology, which has increased the demand for greater computational power. Over the past year, major tech companies and AI hyperscalers have taken steps to invest billions in data centers, and xAI's latest expansion aims to compete with AI models like OpenAI's ChatGPT and Anthropic's Claude by establishing a highly advanced AI model training program. The data center is expected to be operational in Southaven by February 2026.

On December 30, 2025, Elon Musk announced the purchase of this data center, named "MACROHARDRR," stating that it would help increase xAI's computing power to 2GW, though he did not disclose investment details or the location at that time. This data center is located near a recently acquired power plant by xAI and is close to a data center in Memphis, Tennessee. The "Colossus" supercomputer cluster owned by xAI in Memphis is officially recognized by xAI as the world's largest AI supercomputer cluster. According to a Bloomberg report, xAI has spent 7.8 billion dollars in the first nine months of the year, with AI startups typically incurring very high expenses and investing billions in purchasing high-quality data center equipment.