xAI commits over $20 billion to Mississippi Data Center for 'World's Largest Supercomputer'

Record-shattering investment in Southaven targets 2 gigawatts of compute power for Grok; faces environmental scrutiny.

Elon Musk’s xAI, the company behind the Grok chatbot, has announced a massive capital expenditure exceeding $20 billion to build a hyperscale data center in Southaven, Mississippi. The project, which state officials have confirmed as the largest single private investment in Mississippi’s history, is an aggressive push to secure the computational capacity needed to challenge industry leaders OpenAI and Anthropic.

The facility, nicknamed "MACROHARDRR," is scheduled to begin operations as early as February 2026 and will significantly scale xAI’s supercomputer cluster, Colossus.

The race for 2 gigawatts of AI power

The staggering investment is primarily aimed at procuring and installing advanced AI accelerators (GPUs) and related infrastructure to meet the exploding power demands of next-generation large language models (LLMs).

The Southaven facility will be xAI's third major site in the greater Memphis area, strategically clustered near an existing data center in Tennessee and a recently acquired power plant site. When combined, this cluster is expected to approach 2 gigawatts (2GW) of coherent compute power.

Elon Musk described the cluster as "by far the most powerful AI system on Earth," crediting the "insane execution speed" of xAI and the state of Mississippi for the rapid development timeline.

Economic impact

Mississippi Governor Tate Reeves praised the "record-shattering" investment, predicting it would create hundreds of permanent, high-paying jobs in DeSoto County and generate substantial tax revenue for public services.

The Mississippi Development Authority approved significant incentives, including sales and use tax exemptions on computing equipment.

Environmental and community controversy

The ambitious scale and rapid construction of the data center have generated considerable opposition from local environmental and civil rights groups.

Air quality concerns

The NAACP and the Southern Environmental Law Center have raised alarms regarding the potential air pollution generated by the necessary power generation infrastructure, particularly gas turbines, which are often used to power these highly dense computing sites.

These concerns focus on the proximity of the facilities to predominantly Black communities in nearby Memphis.

Local opposition

A local group, the "Safe and Sound Coalition," based in Southaven, has launched a petition demanding the shutdown of xAI’s local operations, arguing the speed of development has circumvented necessary environmental permitting and public consultation processes.

Despite the controversy, xAI is moving ahead rapidly with the project, solidifying the Mid-South region as a central, albeit contested, hub in the global AI infrastructure arms race.