Elon Musk’s artificial intelligence company, xAI, has filed a permit to construct a new facility at its data center complex located outside Memphis, Tennessee. The proposed expansion, which amounts to approximately $659 million, will add a four-story building adjacent to the existing Colossus 2 data center. According to permit documents submitted to the Memphis and Shelby County Division of Planning and Development, the new structure will encompass around 312,000 square feet and is planned for a site at 5414 Tulane Road.
This expansion marks a significant step for xAI as it enhances the infrastructure supporting its flagship large language model, Grok. The new building is designed to reach about 75 feet in height, although specific functions for the facility have yet to be disclosed. The filing was first reported by the Memphis Business Journal.
Growth of xAI in Memphis
xAI entered the Memphis area in 2024 with the launch of its Colossus supercomputer, which was established in a repurposed Electrolux factory in the Boxtown district. Subsequently, the company acquired land for the Colossus 2 data center in March 2025, which became operational in January of the following year. Plans are also underway for a third data center in the cluster, which spans the Tennessee-Mississippi border, with Musk indicating that the entire campus could eventually deliver around 2 gigawatts of computing power.
The Memphis data center cluster is linked to new power infrastructure commitments announced by SpaceX President Gwynne Shotwell. During a White House event, Shotwell confirmed that xAI would develop 1.2 gigawatts of power for its supercomputer facility as part of the administration’s “Ratepayer Protection Pledge.” She emphasized the rapid development capabilities of xAI, stating, “As you know, xAI builds huge supercomputers and data centers, and we build them fast.”
Infrastructure and Community Impact
Shotwell elaborated on the project’s impact, explaining that the installation would provide backup power sufficient for the city of Memphis and the nearby town of Southaven, Mississippi, where the data center is located. The initiative also includes plans to build new substations and enhance the electrical infrastructure to stabilize the region’s power grid.
Additionally, xAI aims to support the area’s water supply through infrastructure improvements associated with the project. Shotwell noted, “We will build state-of-the-art water recycling plants that will protect approximately 4.7 billion gallons of water from the Memphis aquifer each year.” This expansion is expected to create thousands of jobs for American workers across the Memphis area, contributing to the local economy.
With these ambitious plans, xAI is poised to play a significant role in the technological landscape of Memphis, reinforcing its commitment to innovation and community development. The company’s continued investment underscores the growing importance of artificial intelligence in modern infrastructure and the potential benefits it can bring to local populations.
