xAI, Elon Musk’s artificial intelligence company, is investing more than $20 billion to build a data center in Southaven, Mississippi, according to state governor Tate Reeves. The data center, called MACROHARDRR, is being built in Mississippi’s DeSoto County near Memphis, Tennessee. It will be the company’s third data center in the greater Memphis area.
xAI CFO Anthony Armstrong said the cluster of data centers will house “the world’s largest supercomputer” with 2 gigawatts of computing power.
During the announcement, Reeves personally thanked Musk. Reeves predicted the investment would bring hundreds of permanent jobs to the community, thousands of indirect subcontracting jobs, and tax revenue to support public services.
READ: Musk’s xAI in advanced talks to raise $15 billion, according to Wall Street Journal (
Under the incentives for data centers passed in 2024, the state will waive all sales, corporate income and franchise taxes on the xAI development. Saving sales taxes on the computing power that xAI is purchasing would likely be worth a substantial amount of money, according to an ABC news report.
This comes as xAI faces increased scrutiny over its data center projects in the Memphis area. The NAACP and the Southern Environmental Law Center have raised concerns over air pollution generated by xAI’s supercomputer facility located near predominantly Black communities in Memphis.
A petition by the Safe and Sound Coalition, a Southaven group opposing xAI’s developments, calls for shutting down xAI’s operations in the area and has received more than 900 signatures as of Thursday afternoon.
This comes during a time of a massive rise in interest in data centers, with AI hyperscalers investing billions of dollars to scale up infrastructure. xAI’s latest expansion shows its push to compete more effectively with OpenAI’s ChatGPT and Anthropic’s Claude by training increasingly advanced models.
READ: xAI raises $20 billion in Series E round as Grok controversy intensifies (
xAI recently raised $20 billion in a Series E funding round, surpassing its initial $15 billion target. The funding round included participation from Valor Equity Partners, StepStone Group, Fidelity Management & Research Company, and the Qatar Investment Authority, according to the company.
xAI said it plans to use the funding to build out infrastructure, accelerate the development and deployment of AI products, and fund additional research. The funding comes nearly a year after Musk announced that xAI had acquired social media platform X in an all-stock deal.
xAI has also been facing flack recently, for its chatbot Grok generating sexualized images of children and non-consensual intimate images of adults, mostly women. The images were widely shared on X, prompting regulatory probes by authorities in Europe, Malaysia, and India.