Elon Musk’s artificial intelligence company xAI is investing over $20 billion in Mississippi through the establishment of a data center and additional computing infrastructure in Southaven. The project announced Thursday afternoon makes for the largest private-sector investment in the state’s history.
The facility will be over 800,000 square feet on Stateline Road just south of the Tennessee line, where Musk has already invested billions through two Memphis centers for his Colossus supercomputer project, described as the largest supercomputer on record. What it does, in essence, is train xAI’s Grok family and other AI models.
While Musk was not in attendance for the Mississippi announcement, xAI CFO Anthony Armstrong vouched that Southaven will be a “critical part of the world’s largest supercomputer and also home of the power” behind it. The facility will be known as “MACROHARDRR” and will help xAI approach two gigawatts in capacity when combined with the other Colossus sites.
“This is our third major facility in the area, and if you look at coherent compute density, this is it. This area has the largest coherent compute density in the world. By the time we get fully online, we’re going to have about two gigawatts of coherent compute in this area, and we’re going to do more.” Armstrong said. “This is in large part because of the responsiveness and cooperation from [the state of Mississippi], so thank you. We really look forward to partnering going forward.”
The company expects to begin operations in Southaven next month, Armstrong noted.
Armstrong was joined by a bevy of government officials for the announcement, including Gov. Tate Reeves, Southaven Mayor Charlie Musselwhite, and Mississippi Development Authority executive director Bill Cork.
Reeves, who statistically has been the most successful governor in history when it comes to luring private-sector investments, noted the xAI location will create “hundreds of permanent jobs and thousands of indirect, subcontracting jobs.”
Of the $69 billion worth of private investments coming into Mississippi since the Republican governor took office in 2020, data centers make up a large chunk. Before the xAI announcement, the largest project announced by the state was a pair of Amazon data centers in Madison County, a project that is currently being constructed and worth more than $10 billion. Another data center project still in the works is Compass Data Centers in Meridian. It is a $10 billion campus development that will play host to data for a hyperscaler tenant.
“As you’ve heard me say before, Mississippi is not just making news. We’re making history. Today, we are breaking another record that some thought would never be possible,” Reeves said. “xAI’s investment of over $20 billion, again, is the largest private-sector investment in Mississippi history, and it’s twice the size of the previous largest investment.
“The tax revenue generated here as a result of this record-breaking investment will help support vital programs and services like infrastructure, public safety, health and human services, educators, firefighters, police, parks, and more.”
The Mississippi Development Authority has approved xAI for the agency’s data center incentive, which provides a sales and use tax exemption for all computing and equipment software. The city of Southaven and DeSoto County are also supporting xAI through fee-in-lieu agreements.
“It’s a special day,” Musselwhite said. “To the whole xAI team, I want to thank you for this investment. … We celebrate a lot of good economic investments, but this is extra special. This is not a normal one, and we’re very proud to have this here in Southaven. Always know that this is just the beginning, so Southaven will always be poised and prepared to be a great showcase for xAI’s operations.”
While xAI and government officials are celebrating the company’s first Mississippi location, it’s yet to be seen how residents may respond. In Brandon, where a $6 billion data center is being constructed by AVAIO Digital, over 1,000 residents have signed a petition asking for guarantees that the center will not impact utility bills or air quality. In Memphis, where Musk has located his other two Colossus sites, residents have alleged the sites create pollution and emit high-capacity gas turbines. On the flip side, Entergy Mississippi is expanding its grid and ensuring residents in Madison County that the incoming Amazon data centers will not result in increased power bills.