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Musk’s xAI to Invest Over $20 Billion in Mississippi Data Center

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xAI, the artificial intelligence company founded by Elon Musk, will invest more than $20 billion to build a large-scale data center in Southaven, Mississippi, state Governor Tate Reeves said on Thursday.

The investment comes as booming demand for generative AI drives tech companies to sharply expand computing infrastructure. Data centers have become a focal point for spending by AI startups and hyperscalers seeking to train increasingly powerful models.

According to the governor’s statement, xAI expects to begin operations at the Southaven data center in February 2026. Musk had previously announced on December 30 that xAI had acquired a data center named “MACROHARDRR,” saying the facility would lift the company’s total computing capacity to 2 gigawatts, though he did not disclose the investment size or location at the time.

The Southaven site is located near a power plant recently acquired by xAI and close to its existing data center footprint in Memphis, Tennessee, the statement said. Memphis is home to xAI’s flagship supercomputer cluster, Colossus, which the company has described as the largest in the world.

The expansion highlights xAI’s aggressive push to compete more directly with leading AI developers such as OpenAI and Anthropic, whose ChatGPT and Claude models dominate much of the current generative AI market.

xAI’s spending underscores the heavy cash demands of the AI race. Bloomberg reported earlier on Thursday that the company burned $7.8 billion in cash during the first nine months of the year, reflecting the high cost of advanced data center hardware and large-scale model training.

Musk’s xAI buys third building to expand AI compute power

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xAI, the artificial intelligence company founded by Elon Musk, has acquired a third building as part of its effort to significantly expand computing capacity, Musk said on Tuesday. The move is aimed at boosting xAI’s training infrastructure to nearly 2 gigawatts of compute power.

The expansion highlights xAI’s ambition to compete more aggressively with leading AI developers such as OpenAI, which develops ChatGPT, and Anthropic, creator of the Claude chatbot. xAI’s main supercomputer cluster, known as Colossus and located in Memphis, Tennessee, has been described by Musk as the largest in the world.

“xAI has bought a third building called MACROHARDRR,” Musk wrote on X, without revealing the site’s exact location. The name appears to be a play on Microsoft, a major investor in OpenAI.

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The Information, which reported the development earlier citing property records and a person familiar with the matter, said the new building is intended to support a third large-scale data centre planned outside Memphis.

According to the report, xAI plans to expand Colossus to house at least 1 million graphics processing units (GPUs). The company is expected to begin converting the newly acquired warehouse into a data centre in 2026. Both the planned facility and a separate expansion known as Colossus 2 are located near a natural gas power plant that xAI is building, alongside access to other power sources.

The rapid build-out of AI infrastructure has drawn criticism from environmental groups, who warn that large data centres consume vast amounts of energy and place strain on local power grids.

SoftBank to Acquire DigitalBridge in $4 Billion Deal to Strengthen AI Infrastructure Strategy

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SoftBank Group has agreed to acquire digital infrastructure investor DigitalBridge Group in a deal valued at $4 billion, the companies announced on Monday. The acquisition marks another step in SoftBank’s effort to reshape its portfolio around artificial intelligence and the computing infrastructure that supports it.

Under the terms of the agreement, SoftBank will pay $16 per share for DigitalBridge, representing a 15% premium over the company’s closing price on Friday. The offer values DigitalBridge at approximately $2.92 billion, with the transaction expected to close in the second half of next year. Following the announcement, DigitalBridge shares rose about 9.7% to $15.27, extending gains after a 45% rally earlier this month when takeover talks were first reported.

The deal significantly expands SoftBank’s exposure to digital infrastructure assets, including data centers, cell towers, fiber networks, small-cell systems and edge infrastructure. DigitalBridge’s portfolio includes major assets such as Vantage Data Centers, Zayo, Switch and AtlasEdge, positioning the firm as a key player in the backbone of global data and connectivity.

SoftBank founder Masayoshi Son has repeatedly emphasized the importance of computing power in enabling next-generation AI applications. The acquisition aligns with his broader vision to capitalize on surging demand for data processing capacity driven by artificial intelligence workloads.

Industry reaction was cautiously optimistic. Jacob Yahiayan, CEO of Urban Logistic Advisory Services, an investor in DigitalBridge, described the acquisition as “a milestone in solving critical infrastructure issues,” while noting that SoftBank remains far from controlling a significant share of the global hardware- and software-as-a-service market.

Founded in 1991 as Colony Capital, DigitalBridge shifted its strategy under CEO Marc Ganzi, pivoting away from traditional real estate toward digital infrastructure and rebranding in 2021. Ganzi will continue to lead DigitalBridge as a separately managed platform following the acquisition.

As of September 30, DigitalBridge managed approximately $108 billion in assets, making it one of the largest dedicated investors in the digital infrastructure ecosystem. The company is also involved in the Stargate project, alongside OpenAI, Oracle and Abu Dhabi-based investor MGX, a large-scale computing initiative aimed at supporting advanced AI development.