Elon Musk reveals plan to expand xAI’s ‘Colossus’ data center to 2 gigawatts – News

Elon Musk’s xAI Corp. is looking to expand its sprawling artificial intelligence data center complex in Memphis after purchasing a third building at the site.

It’ll house thousands of new servers that cater to AI models and bring the site’s total computing capacity to almost 2 gigawatts, Musk (pictured) wrote in a post today on X.

The facility, known as “Colossus,” already houses one massive data center building and there is currently a second one under construction at a nearby site that has been dubbed as “Colossus 2.” The third site is adjacent to Colossus 2, located near the town of Southaven, Mississippi, according to property records seen by The Information.

Musk founded xAI in 2023 as a rival to OpenAI Group PBC, which he initially co-founded and invested in before falling out with Chief Executive Sam Altman. He said at the time that xAI aims to build AI systems that are transparent, safe and beneficial to humanity, as opposed to seeking profits like OpenAI does. The company is best known for its generative AI chatbot Grok, which is deeply integrated with the X platform, allowing it to access real-time information.

XAI intends to transform the newly-purchased warehouse at Southaven into a data center during the new year. The Information’s report added that it’s located close to a natural gas power station that the company is also building in the area, and has access to additional power sources.

xAI has bought a third building called MACROHARDRR. Will take @xAI training compute to almost 2GW.

Try @Grok. Download latest app.

— Elon Musk (@elonmusk) December 30, 2025

AI data centers such as Colossus have come in for a lot of criticism for their extensive power demands. Two gigawatts is enough energy to power about 1.5 million U.S. homes for an entire year, and the new facility will also require vast amounts of water to cool the servers and infrastructure housed inside it. According to The Information, xAI expects to use “millions of gallons of water” per day at the site.

However, xAI has taken steps to reduce its environmental footprint. In February it announced a plan to build a new wastewater treatment center near Colossus at a cost of around $80 million. The facility will enable xAI to reuse approximately 13 million gallons of wastewater per day.

Musk has said in the past that he envisions Colossus becoming the world’s largest data center for AI training. The Colossus 2 facility is expected to house more than 555,000 graphics processing units from Nvidia Corp., which will be bought at the fantastically expensive price of about $18 billion. That sum doesn’t include the cost of related equipment, such as the servers and cooling systems they’ll require.

Musk isn’t paying these expenses out of his own pocket. Rather, xAI has embarked on an aggressive fundraising effort to fuel its ambitions. In July, it announced it had raised $10 billion in capital in the shape of equity funding and loans. Since then, it has held talks with Saudi Arabia’s PIF sovereign wealth fund and other investors on a further $20 billion raise that would bring its value to over $170 billion.

Photo: tldv.io