xAI, Elon Musk’s artificial intelligence company, has recently filed a permit to construct a new building at its expanding data center complex near Memphis, Tennessee. According to a report from Data Center Dynamics, xAI is planning to invest approximately $659 million in a new facility adjacent to its existing Colossus 2 data center. The proposed four-story building will cover around 312,000 square feet of space.
The new building will be situated on a 79-acre parcel at 5414 Tulane Road, next to xAI’s Colossus 2 data center site. While the specific purpose of the structure has not been disclosed, permit documents indicate that it will stand about 75 feet high. The Memphis Business Journal was the first to report on this filing.
xAI utilizes its Memphis data centers to power Grok, its flagship large language model. The company first entered the Memphis area in 2024 by launching the Colossus supercomputer in a repurposed Electrolux factory in the Boxtown district. Last year, xAI acquired land for the Colossus 2 data center, which became operational in January.
Additionally, a third data center is in the works for the cluster located on the Tennessee-Mississippi border. Elon Musk has mentioned that the overall campus could eventually offer access to around 2 gigawatts of compute power.
The Memphis cluster is also linked to new power infrastructure commitments made by SpaceX President Gwynne Shotwell. During an event with President Donald Trump, Shotwell announced that xAI would generate 1.2 gigawatts of power for its supercomputer facility as part of the administration’s “Ratepayer Protection Pledge.”
Shotwell emphasized, “xAI constructs massive supercomputers and data centers quickly. Currently, we are constructing one on the Tennessee-Mississippi state line… xAI will commit to developing 1.2 GW of power as our supercomputer’s primary power source. This will apply to every additional data center as well… This setup will offer sufficient backup power to supply the city of Memphis and more than enough energy for the town of Southaven, Mississippi where the data center is located. We will establish new substations and invest in electrical infrastructure to enhance the area’s grid stability.”
Furthermore, Shotwell mentioned xAI’s plans to support the region’s water supply through new infrastructure associated with the project. “We will construct cutting-edge water recycling facilities that will safeguard approximately 4.7 billion gallons of water from the Memphis aquifer annually. Additionally, we will hire thousands of American workers from the city of Memphis on both sides of the TN-MS border,” she added.