Xai, an AI company for Elon Musk, has acquired 1 million square feet of property in southwest Memphis to expand the footprint of its AI data centers, according to a press release from the Memphis Chamber of Commerce.
The new land will host infrastructure that complements Xai’s existing Memphis data center.
“The acquisition of this property at Xai ensures that we remain at the forefront of AI innovation here in Memphis,” Xai’s senior site manager Brent Mayo said in a statement.
It was not immediately clear whether the expansion was associated with a previously announced lease at the 522-acre site in Memphis.
Xai is hungry for AI hardware. Reports say the startup recently built a second data center in Atlanta, with $700 million worth of chips and other equipment. They also signed a deal with Dell to purchase a GPU pack server worth $5 billion.
Xai uses data centers to train and run Grok, a family of AI models. The company plans to upgrade its major Memphis-based facility called the Colossus to one million Nvidia GPUs over the course of this year, up from 100,000 last year.
Some residents have criticised the continued expansion of Xai in Memphis, claiming it would strain the grid and worsen the air quality of the region. To try to win them, Xai provided discounted Tesla manufacturing batteries to local utilities and built a water recycling plant.
To fund part of the AI infrastructure project, Xai is said to be discussing $10 billion in funding that cherishes the $75 billion company. Xai closed its final funding round in late 2024.