Elon Musk’s AI company, xAI, acquires 1 million-square-foot property in Memphis

xAI, Elon Musk’s AI company, has acquired a 1 million-square-foot property in Southwest Memphis to expand its AI data center footprint, according to a press release from the Memphis Chamber of Commerce.

The new land will host infrastructure to complement xAI’s existing Memphis data center.

“xAI’s acquisition of this property ensures we’ll remain at the forefront of AI innovation, right here in Memphis,” xAI senior site manager Brent Mayo said in a statement.

It wasn’t immediately clear whether the expansion was related to a previously announced lease on a 522-acre site in Memphis.

xAI is hungry for AI hardware. According to reports, the startup recently built a second data center in Atlanta with $700 million worth of chips and other equipment. It also inked a deal with Dell to buy $5 billion worth of GPU-packed servers.

xAI uses its data centers to train and run its family of AI models, Grok. The company plans to upgrade its primary Memphis-based facility, called Colossus, to 1 million Nvidia GPUs sometime this year, up from 100,000 last year.

Some residents have criticized xAI’s continued expansion in Memphis, arguing it will strain the grid and worsen the area’s air quality. To attempt to win them over, xAI has provided the local utility with discounted Tesla-manufactured batteries and constructed a water recycling plant.

Partly to fund its AI infrastructure projects, xAI is said to be discussing a $10 billion round of fundraising that would value the company at $75 billion. xAI closed its last funding round, which topped out at $6 billion, in late 2024.