Demand for data center capacity surged last year amid the artificial intelligence boom. As a result, power grids in developed countries have begun to face growing strain from the increased load.
On December 30, Musk announced the purchase of a data center dubbed MACROHARDRR—widely seen as a tongue-in-cheek reference to Microsoft, using an antonym of the company’s name with an added “RR” suffix. At the time, Musk did not disclose detailed plans, saying only that the facility would expand xAI’s available computing capacity to 2 gigawatts.
According to Governor Reeves, the data center is located in the city of Southaven, near a power plant that was also recently acquired by the startup. The facility is expected to begin operations as early as February.
In September 2024, xAI launched its Colossus AI training cluster in Memphis, Tennessee, using 100,000 Nvidia H100 GPUs. At the time, it was considered the largest AI training cluster in the world. Environmental groups criticized the site for worsening local environmental conditions due to its reliance on gas turbines.
In January 2025, U.S. President Donald Trump announced plans for $500 billion in private investment into AI infrastructure. The initiative envisioned an initial $100 billion investment through a joint venture called Stargate, backed by OpenAI, SoftBank, and Oracle, with the amount to be expanded later. Experts, however, questioned whether the project would be able to attract the full volume of capital outlined.
xAI’s expansion is a clear signal that today’s AI race is no longer defined by models alone, but by physical infrastructure: power, land, and access to the grid. A single-site investment exceeding $20 billion shows that compute has become a strategic asset, with U.S. states increasingly competing against each other on infrastructure readiness
