Elon Musk Eyes $20 Billion Data Centre Build-Out in Mississippi

Elon Musk-founded artificial intelligence company xAI said it will locate its next major data-centre expansion in Southaven, Mississippi, where an 800,000-square-foot building will house infrastructure for its Colossus 3 supercomputer, as the company moves to sharply scale computing power needed to train advanced AI models.

Mississippi Governor Tate Reeves on Thursday said that xAI is preparing a $20 billion investment to build a data centre in Southaven, calling it the largest private investment the state has ever seen.

The newly acquired facility, referred to by Musk on social media as “MACROHARDRR,” is to be converted into an additional data center beginning in 2026. Musk wrote on X that the expansion will help xAI’s training compute capacity approach nearly 2 gigawatts, a level of power that would place it among the most computationally intensive AI facilities in the world.

The facility forms part of a multi-billion-dollar infrastructure expansion by xAI, underscoring the escalating global race to secure massive computing power for training advanced artificial intelligence models. The building is the latest addition to xAI’s growing cluster of AI infrastructure in the greater Memphis region.

According to xAI executives present at the unveiling, the Colossus 3 datacenter is designed to dramatically scale the company’s compute capacity and support future generations of large language models. “This facility is foundational to our long-term AI roadmap,” a senior xAI executive said, adding that the scale of the build reflects the increasing computational demands of frontier AI systems.

State and local officials described the project as a landmark investment for Mississippi. Mississippi Governor Tate Reeves called it “one of the most significant private technology investments the state has ever seen,” saying it positions the region as a major hub in the global AI economy. Local authorities said the project is expected to create hundreds of direct jobs and generate broader economic activity through construction, maintenance, and supporting services.

Colossus program 

The Colossus program has drawn attention for its pace and scale. xAI’s earlier Colossus deployments were built in record time, challenging traditional timelines for supercomputing infrastructure. With Colossus 3, the company is expected to expand into hundreds of thousands of high-performance GPUs, pushing power consumption and cooling requirements to unprecedented levels.

However, the rapid expansion has also sparked scrutiny. Community groups and environmental advocates have raised concerns around energy usage, emissions from backup power systems, and local environmental impact. In response, xAI representatives said the company is engaging with regulators and investing in efficiency and mitigation measures, though specific details were not disclosed.

Industry analysts say Colossus 3 highlights how access to compute has become a strategic differentiator in AI. “The companies that control large-scale infrastructure will define the next phase of AI development,” said an independent data-center analyst tracking hyperscale AI builds.

As competition intensifies among AI leaders, xAI’s latest move signals that the battle for dominance is increasingly being fought not just in algorithms, but in concrete, steel, and megawatts of power.