Elon Musk and his AI startup company xAI have expanded its footprint in Memphis, Tennessee with the purchase of a 1-million-square-foot property, said to be the future site of the world’s largest supercomputer.
The property, located in the Southwest part of Memphis, is the first step in a plan announced last June to expand xAI’s Colossus supercomputer. The city has been hosting the supercomputer live since August 8th, 2024.
The Chamber said xAI has leased 552 acres of land in Memphis’ Frank C. Pidgeon Industrial Park to develop over the coming years and expand its core operations.
“xAI marks the spot in MEMPHIS,” the Greater Memphis Chamber posted on its website on Friday. The Chamber also touted the company's expansion on X and its "focus on sustainability."
"xAI has purchased a 1M sq. ft. facility in Southwest Memphis, strengthening its Digital Delta presence and commitment to innovation," it said.
xAI Expands in Memphis with a Focus on Sustainability 💡🌎
undefined Greater Memphis Chamber (@MemphisChamber) March 7, 2025
xAI has purchased a 1M sq. ft. facility in Southwest Memphis, strengthening its Digital Delta presence and commitment to innovation. This expansion builds on the growth of the Colossus supercomputer and a groundbreaking…
Memphis says xAI’s permanent descent on the Home of the Blues has several benefits, the most important of which is that it will allow the city to “actively compete in the AI race with major global tech hubs.”
“Besides adding hundreds of jobs, the expansion is expected to attract other major AI and technology companies which will further position Memphis as the Digital Delta and grow our local economy,” the Chamber said.
Colossus currently runs on 200,000 Nvidia H100 chips as announced this past December, with the Musk-founded company planning to add another 125,000 H100/H200/GB200 chips later this year.
“Well on its path to supercluster size,” the Chamber says Colossus is expected to run on 1 million chips by 2026. Once fully operational, Colossus will use 300 megawatts of power, it said.
xAI also leased 13 acres of land as part of a separate deal with the Memphis City Council to build the Colossus Water Recycle Plant, an $80 million greywater facility.
The plant is expected to help reduce strain on the city’s aquifer and protect 4.75B gallons of water annually, the Chamber said, although there has been some pushback from local community members and environmental groups.
On Wednesday, it was reported that Tesla is also building a 1-million-square-foot factory in Texas to manage and store its Megapack energy products, which are currently being used as a backup generator source for the Colossus supercomputer in the event of a power surge.
“xAI is also deploying the world’s largest Tesla Megapack to ensure zero grid impact during peak demand, prioritizing energy for Memphis residents. Tech meets sustainability right here in Memphis,” the Chamber said on X.
The investment is seen as pivotal in advancing Musk's AI ambitions, as he works to gain a competitive edge over rivals such as OpenAI following the recent escalation in tensions between him and ChatGPT maker's CEO, Sam Altman, with the billionaire's bid to take control of the firm, Reuters said.
Memphis officials say the Musk-founded AI startup chose its city because of its reliable power grid, ability to create a wastewater facility, proximity to the Mississippi River and ample land.
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