Elon Musk’s AI startup xAI (X.AI) is investing over $20B to build a data center in Southaven, Mississippi, according to the office of state Governor Tate Reeves.
The project will create hundreds of permanent jobs throughout DeSoto County, the statement added.
The data center, which will be known as MACROHARDRR, is in proximity to xAI’s newly acquired power plant site in Southaven and one of the company’s existing data centers in Tennessee.
After completion, the Southaven data center will increase the company’s computing power to nearly 2 gigawatts.
The AI company — which operates the Grok AI chatbot — has bought and is retrofitting a building to house the new data center operations. The company expects to start data center operations in Southaven in February.
Last month, xAI and Tesla (TSLA) CEO Musk said in a post on his social media platform X that xAI bought a third building called MACROHARDRR for the construction of a third data center near Memphis, Tenn. It was reported that the 810,000-square-foot facility is located just across the state line from Memphis in Southaven. It is positioned near the Colossus 2 data center.
Reeves’ office said that the Mississippi Development Authority has approved xAI for its Data Center Incentive, which provides a sales and use tax exemption for all computing and equipment software used by companies certified as data centers by the agency. The City of Southaven and DeSoto County are also supporting xAI’s projects through fee-in-lieu agreements.
Earlier on Friday, it was reported that xAI saw a net loss of $1.46B for the September quarter, up from $1B in the prior quarter, driven by heavy spending on AI infrastructure and development.
Interest in data centers spiked last year as tech giants planned and invested billions of dollars in capital expenditure to scale up infrastructure.
Musk’s xAI’s Grok competes with Microsoft (MSFT)-backed OpenAI’s (OPENAI) ChatGPT, Alphabet (GOOG) (GOOGL) unit Google’s Gemini, and Anthropic’s (ANTHRO) Claude, among several other AI products.