Artificial Intelligence

Musk's xAI Acquires Third Building for AI Data Center

Is xAI's Memphis facility environmental racism against a Black community, or transformative economic opportunity for the city?

Published DEC 31 2025

Musk's xAI Acquires Third Building for AI Data Center

Story

Image credit: Samuel Boivin/NurPhoto/Getty Images

The Facts

Elon Musk said on Tuesday that his artificial intelligence company xAI has acquired a third building to expand its data center infrastructure, which will increase the company's AI training computing capacity to nearly 2 gigawatts.
Elon Musk on X
Cnbctv18.Com
voidotid
The newly purchased building is located in Southaven, Mississippi, and is adjacent to xAI's Colossus 2 facility. In an X post, Musk named the building "MACROHARDRR."
Elon Musk on X
The Asia Business Daily
Bloomberg
xAI operates a supercomputer cluster in Memphis, Tennessee, known as Colossus, which has been described as the largest AI training cluster in the world. The company is currently constructing a second nearby site called Colossus 2.
xAI
NewsBytes
Daily Times PK
Musk has stated that Colossus 2 will eventually have 550,000 chips from Nvidia Corp, while xAI plans to expand Colossus to house at least 1 million graphics processing units.
The Times of India
The Edge Malaysia
Reuters
Additionally, the company plans to begin converting the newly acquired warehouse into a data center in 2026. Both the new facility and Colossus 2 are located near a natural gas power plant that xAI is building in the area.
The Hindu BusinessLine
Daily Times PK
The Information

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The Spin

Techno-skeptic narrative

xAI's Memphis data center highlights environmental racism at its worst, dumping toxic pollution into a historically Black neighborhood already suffering from industrial contamination. The company operated over 30 unpermitted gas turbines for months, violating the Clean Air Act, while residents developed respiratory diseases from the rotten-cabbage smell permeating their homes. This dangerous precedent allows billionaires to sacrifice vulnerable communities for profit.

Guardian

People

Techno-optimist narrative

xAI's facilities bring transformative economic opportunity to localities they operate in — like Memphis — creating hundreds of high-paying jobs with compensation up to $200 per hour and generating millions in tax revenue. xAI is investing over $10 billion and building an $80 million graywater recycling facility to protect the Memphis Aquifer for generations. Business-friendly environment attracts innovative companies that deliver real prosperity.