In a decisive move to solidify its position in the global artificial intelligence arms race, Elon Musk’s xAI has officially acquired a third industrial facility to expand its unprecedented computing infrastructure. The acquisition, confirmed by property records and a recent announcement from Musk, marks a critical phase in the development of the "Colossus" supercomputer cluster, which is rapidly becoming the most powerful AI training environment in existence. The newly purchased warehouse, an 810,000-square-foot site located in Southaven, Mississippi, sits directly adjacent to the company’s existing Colossus 2 facility. This strategic expansion is designed to propel xAI’s total power capacity toward a staggering two gigawatts, a threshold that would provide enough electricity to power more than 750,000 American homes simultaneously.
Musk, known for his unconventional branding, has reportedly dubbed the new facility "MACROHARDRR," a characteristic nod to industry rival and OpenAI benefactor Microsoft. The purchase underscores a philosophy of radical vertical integration that distinguishes xAI from its primary competitors, OpenAI and Anthropic. While those organizations rely heavily on established cloud partnerships with giants like Microsoft and Amazon, xAI is aggressively building and owning its own hardware and power infrastructure. By securing this third site, the company is laying the groundwork to eventually house up to one million high-performance graphics processing units (GPUs), a scale of compute that was considered technologically impossible only a few years ago.
The expansion comes as xAI continues to iterate on its Grok AI models, seeking to surpass the capabilities of the world's current leading large language models. The Colossus cluster in the Memphis region has already set industry records for the speed of its deployment; the first phase, powered by 100,000 Nvidia H100 GPUs, was famously brought online in just 122 days. The second phase, Colossus 2, is currently under construction and is expected to integrate over 550,000 advanced Nvidia chips. By acquiring the Southaven facility, xAI is ensuring that the infrastructure bottleneck that plagues much of the AI industry specifically the lack of physical space and electrical grid capacity will not hinder its trajectory through 2026 and beyond.
To manage the immense electrical demands of such a facility, xAI is not merely relying on the local municipal grid. The company is currently funding the construction of a natural gas power plant in the area and deploying massive arrays of Tesla Megapacks to stabilize energy delivery. This independent power strategy is vital for maintaining the 24/7 uptime required for training the next generation of frontier AI models. Despite the rapid progress, the project has not been without scrutiny; environmental advocates and local community members have raised questions regarding the long-term impact on the region’s water and energy resources. In response, xAI has initiated plans for specialized wastewater treatment facilities to mitigate its environmental footprint while maintaining its aggressive growth schedule.
The financial scale of these ambitions is equally formidable. Throughout 2025, xAI has been the focus of high-stakes fundraising efforts, reportedly closing multi-billion dollar rounds at valuations exceeding $200 billion. These funds are being directly funneled into the acquisition of the world’s most advanced semiconductors and the massive physical infrastructure needed to house them. As the transition of the new Southaven warehouse into a high-tier data center is slated to begin in 2026, the tech industry is watching closely. This latest move signals that Musk is betting the future of his artificial intelligence enterprise on raw, proprietary power, ensuring that xAI remains at the absolute forefront of the race to achieve artificial general intelligence.
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