Musk's xAI buys third building to expand AI compute power

Elon Musk said on Tuesday his artificial intelligence startup xAI has bought a third building to expand its infrastructure, aiming to boost training capacity to nearly 2 gigawatts of compute power.

The latest expansion underscores xAI’s ambitious push to compete more effectively with industry leaders OpenAI’s ChatGPT and Anthropic’s Claude by training increasingly advanced models. The company’s supercomputer cluster in Memphis, Tennessee, known as Colossus, is touted as the largest in the world.

“xAI has bought a third building called x,” Musk wrote on X, without disclosing its location. The term is potentially a play on Microsoft’s name.

The Information, which reported the development earlier in the day, citing property records and a person familiar with the project, said the building for a third supersized data center is planned outside Memphis.

xAI is planning to expand its supercomputer Colossus to house at least 1 million graphics processing units.

The startup is planning to start turning the newly purchased warehouse into a data center in 2026, the Information reported, adding that both the new data center and Colossus 2 are close to a natural gas power plant that xAI is building in the area, as well as other power sources.

The expansion of AI infrastructure, however, has drawn criticism from environmental activists as data centers consume large amounts of energy.

xAI did not immediately respond to a Reuters request for comment.