xAI, the artificial intelligence company founded by Elon Musk, has made a significant move to expand its AI data center footprint by acquiring a 1 million-square-foot property in Southwest Memphis, Tennessee. According to a press release from the Memphis Chamber of Commerce, the new property will host infrastructure to complement xAI's existing Memphis data center.

The acquisition is a strategic step for xAI to remain at the forefront of AI innovation, as stated by xAI senior site manager Brent Mayo. The company's hunger for AI hardware is evident, with recent reports indicating that it has built a second data center in Atlanta worth $700 million and inked a deal with Dell to purchase $5 billion worth of GPU-packed servers.

xAI's data centers play a critical role in training and running its family of AI models, known as Grok. The company plans to upgrade its primary Memphis-based facility, called Colossus, to 1 million Nvidia GPUs by the end of the year, a significant jump from 100,000 last year. This expansion is expected to further accelerate xAI's AI innovation capabilities.

However, not everyone is thrilled with xAI's continued expansion in Memphis. Some residents have raised concerns that the growth will strain the local grid and worsen air quality in the area. In an effort to address these concerns, xAI has provided the local utility with discounted Tesla-manufactured batteries and constructed a water recycling plant.

xAI's ambitious AI infrastructure projects require significant funding, and the company is reportedly discussing a $10 billion round of fundraising that would value the company at $75 billion. This would be a substantial increase from its last funding round, which topped out at $6 billion in late 2024.

The acquisition of the 1 million-square-foot property in Memphis marks a significant milestone in xAI's growth trajectory. As the company continues to push the boundaries of AI innovation, its expanding data center footprint will be crucial in supporting its ambitions. The deal also underscores Memphis's growing reputation as a hub for AI and technology innovation.

With xAI's aggressive expansion plans and significant investments in AI hardware, the company is poised to remain a major player in the AI landscape. As the AI industry continues to evolve, xAI's Memphis expansion is likely to have far-reaching implications for the sector as a whole.