Elon Musk's xAI continues expansion, to invest over $20 billion in Mississippi data center: All we know

World's richest man Elon Musk's artificial intelligence startup xAI is pouring over $20 billion to build a data center in Southaven, Mississippi, as it looks to take on rivals OpenAI and Anthropic amid rising demand for AI computing power, as per a Reuters report on 9 January.

The facility is expected to start operations in February 2026 and is part of the company's expansion plans.

In its report earlier today, Bloomberg said that xAI reported $1.46 billion net loss in the September quarter, compared to $1 billion in the previous one. Notably, the company is burning cash quickly, with losses mounting as it spends to build data centers, recruit talent and develop software that will eventually power humanoid robots, it added citing internal documents.

All we know about xAI's Mississippi data centre

• The billionaire's AI startup is investing more than $20 billion to build a data center in Southaven, Mississippi.
• This was announced by Mississippi state Governor Tate Reeves in a statement on 8 January (Thursday, local time).
• According to a Reuters report, the move aligns with the boom in generative AI demand and consequent need for increased computing power.

• Interest in data centers swelled last year as tech giants and AI hyperscalers planned and invested billions of dollars in spending to scale up infrastructure. xAI's latest expansion underscores its ambitious push to compete more effectively with industry leaders OpenAI's ChatGPT and Anthropic's Claude by training increasingly advanced models, it said.
• xAI expects to begin data center operations in Southaven in February 2026, Governor Reeves' statement added.
• Elon Musk had announced the purchase of the data center, called "MACROHARDRR", on December 30. The billionaire had said that it would take xAI's compute power to 2GW but did not provide investment details or its location at the time.

• The data center is close to xAI’s newly acquired power plant site in Southaven and its existing data center in Memphis, Tennessee, according to the governor's statement.
• Memphis houses xAI's supercomputer cluster known as Colossus, touted as the largest in the world.
• The company has spent $7.8 billion in cash in the first nine months of the year, Bloomberg reported earlier in the day, as startups in the AI space typically burn through huge amounts of cash, with billions poured into acquiring pricey, advanced data center hardware.

(With inputs from Reuters, Bloomberg)