Elon Musk’s xAI to Invest Over $20 Billion in Massive Mississippi Data Center Expansion
GeokHub
GEOKHUB | Southaven, Mississippi — Jan 9 Elon Musk’s artificial intelligence startup xAI is committing more than $20 billion to build a large-scale data center in Southaven, Mississippi, marking one of the biggest AI infrastructure investments ever announced in the state.
Mississippi Governor Tate Reeves confirmed the investment on Thursday, saying the project reflects the surging demand for computing power as generative AI models grow larger and more complex.
The new facility is expected to begin operations in February 2026 and will significantly expand xAI’s ability to train advanced AI systems, as the company pushes to compete with established players such as OpenAI and Anthropic.
Musk revealed late last year that xAI had acquired the site — known internally as “MACROHARDRR” — noting at the time that it would boost the company’s total computing capacity to roughly 2 gigawatts, though he did not disclose its location or investment size.
The Southaven data center sits near xAI’s recently purchased power generation site and close to its existing infrastructure hub in Memphis, Tennessee, where the company operates its flagship supercomputer cluster, Colossus, which Musk has described as the world’s largest.
The investment comes as AI companies and cloud hyperscalers race to secure power, land, and specialized hardware amid a global data center construction boom. Industry-wide spending has surged as firms pour billions into infrastructure needed to support next-generation AI models.
Despite the aggressive expansion, xAI has been burning through capital at a rapid pace. The company spent $7.8 billion in cash during the first nine months of the year, reflecting the enormous costs associated with advanced chips, energy supply, and large-scale data center operations.
Still, the Mississippi project underscores Musk’s long-term ambition to make xAI a dominant force in artificial intelligence — backed by vast computing resources capable of training increasingly powerful models.
State officials said the investment is expected to bring substantial economic activity to the region, strengthening Mississippi’s position in the fast-growing AI and data infrastructure economy.
