On Thursday local time, Mississippi Governor Tate Reeves issued a statement saying that as the generative artificial intelligence (AI) boom drives up the demand for computing power, Elon Musk's AI startup xAI plans to invest more than $20 billion to build a data center in Southhaven, Mississippi .
The statement said that xAI expects to start operations of the data center in Southhaven in February 2026.
The statement also noted that the data center is located next to xAI’s newly acquired power plant in Southhaven, as well as close to its existing data center in Memphis, Tennessee.
xAI's supercomputer cluster in Memphis, Tennessee, named "Colossus," is touted as the world's largest of its kind. The company previously built its first data center, Colossus, in Memphis and is currently constructing a second facility, Colossus 2, nearby.
On December 30 last year, Musk announced the purchase of a building named "MACROHARDRR" with the aim of increasing training computing power to nearly 2 gigawatts. He did not disclose details of the investment or the building's specific location.
Over the past year, global tech giants have been racing to invest heavily in AI infrastructure in an effort to gain dominance in the AI race. xAI's latest expansion underscores its ambitious efforts to train more advanced models and compete more effectively with industry leaders such as OpenAI's ChatGPT and Anthropic's Claude.
Last November, xAI released Grok 4.1, a new version of its flagship chatbot Grok, which it touted as "the most powerful model to date." Musk revealed that Grok 5 is expected to be released in the first quarter of next year, and that the model has a 10% probability of achieving artificial general intelligence (AGI).
At a recent xAI all-hands meeting, Musk stated that if the company can successfully navigate the next two to three years, xAI will be able to outperform its competitors. He emphasized that the rapid expansion of computing power and data capacity is the key to victory. He also predicted that xAI may achieve AGI within the next few years, possibly as early as 2026.
Recent reports indicate that xAI burned through $7.8 billion in cash in the first nine months of last year, while recording a net loss of $1.46 billion in the third quarter. The company is burning through cash rapidly and incurring increasing losses as it spends money building data centers, recruiting talent, and developing the software that will ultimately power humanoid robots.
On Wednesday, xAI announced that it had raised $20 billion in its latest funding round. This amount not only exceeded the company's initial target of $15 billion, but also doubled its valuation since last spring to $230 billion.
