Elon Musk Is Ramping AI Compute At Breakneck Speed — Inside xAI’s Expanding Data Center Footprint

• Elon Musk is aggressively expanding xAI’s cloud capacity and infrastructure needed for the development of its AI business, Grok.
• xAI operates a massive data center complex in Memphis, Tennessee, which is currently undergoing expansion.
• The company’s first overseas site is expected to come up in Saudi Arabia.

Elon Musk on Tuesday said xAI has purchased a third site for a data center complex, which, once ready, would scale the company’s cloud computing capacity to 2 gigawatts – and even gave it a clever name, “MACROHARDRR” — a potshot at Microsoft. 

Since setting up xAI – the umbrella firm for Musk’s AI and social media ventures – two years ago, the billionaire has moved at a brisk pace to scale the company’s AI infrastructure.

xAI boasts a massive presence in Memphis, Tennessee, and is scaling rapidly in the U.S., and is planning its first overseas data center site in Saudi Arabia. Here’s a look at the company’s data center footprint.

A Colossal Project

The Memphis site, known as Colossus and built at a former Electrolux facility, is the heart of xAI’s compute operations. The site went live with 100,000 H100 Nvidia clusters in September 2024 – a feat, Musk said at the time, achieved in just 122 days. 

He had said in an X post, “Colossus is the most powerful AI training system in the world,” and would double capacity to “200k (50k H200s) in a few months.” 

Over the past year, Musk has repeatedly signaled plans to scale aggressively. xAI’s data centers, which host and train Grok — the company’s flagship AI bot competing with ChatGPT and Google’s Gemini — require additional capacity to support surging demand for AI applications. Musk has boldly set a target of compute capacity equivalent to 50 million units of H100 servers in five years. 

To be sure, some residents have criticized xAI's continued expansion in Memphis, arguing it will strain the grid and worsen the area’s air quality. To win them over, xAI has provided the local utility with discounted Tesla-manufactured batteries and built a water-recycling plant.

Colossus 2

Central to the expansion is new funding; xAI is reportedly in talks to raise about $15 billion in debt and equity from investors, mainly to expand its AI infrastructure.

Earlier this year, Musk announced a second site, Colossus 2, located in South Memphis. The complex is being built on 186.13 acres of land that xAI purchased for $79.9 million.

In July, Musk disclosed that “the first batch of 550k GB200s & GB300s” were going live at Colossus 2, while Colossus 1 had 230,00 GPUs, including 32,000 GB200s, up and running. The GB200s and GB300s are built on Nvidia’s Blackwell architecture, designed to deliver substantial performance for training and inference of advanced AI models.

Upcoming Sites

In November, xAI announced a partnership with Saudi Arabia's state-backed AI venture, Humain, to build a huge 500 MW AI data center in the Kingdom, which would be xAI's largest overseas facility.

Earlier in the year, Business Insider reported that xAI is working on another data center complex in Atlanta, Georgia.

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