Elon Musk is adding more muscle to his AI ambitions.
On Dec. 30, the billionaire revealed that xAI has acquired a third building tied to its fast-growing “Colossus” data center project, bringing the company closer to one of the largest AI training setups in the world.
The new building, called MACROHARDRR, adds to the existing Colossus complex in the Memphis area. According to reporting by The Information, cited by Bloomberg, the newly acquired building is a large warehouse located outside Memphis, near Southaven, Mississippi.
Property records show it is intended to become an additional data center supporting Colossus and the nearby Colossus 2 facility, which is still under construction.
Musk has previously described Colossus as central to his ambition of building the world’s largest AI training system. Earlier this year, he said Colossus 2 is expected to eventually house around 550,000 Nvidia chips, a buildout that would cost tens of billions of dollars.
According to Musk, the third building purchase would push xAI’s total training capacity to nearly two gigawatts of compute power, placing it among the most energy-intensive AI projects in the world.
Founded in 2023, xAI is Musk’s direct challenge to leading AI players such as OpenAI and Anthropic. Its flagship product, the Grok chatbot, is tightly integrated with X, giving it access to real-time information.
With the addition of a third building and a clear path toward multi-gigawatt compute capacity, Musk is signaling that xAI’s push into large-scale AI training is far from slowing down — even as questions around cost, power, and sustainability continue to grow.
Powering the beast
A 2-gigawatt facility requires an immense amount of energy, roughly enough to power 1.5 million US homes. To meet this demand, xAI is building its own infrastructure, including a natural gas power plant in the area to provide a dedicated electricity source.
However, the rapid growth has hit some local resistance. Environmental activists and residents in the Memphis and Southaven areas have raised concerns over the massive energy consumption and the air emissions from the gas turbines.
To address the environmental footprint, specifically regarding water use for cooling, xAI is moving forward with an $80 million wastewater treatment center. This facility is designed to allow the company to reuse approximately 13 million gallons of water per day, significantly reducing its reliance on local drinking water supplies.
The $200 billion valuation race
The sheer cost of this project is being fueled by aggressive fundraising. In 2025, xAI has been in talks to raise an additional $20 billion in debt and equity, a move that could push the company’s valuation toward the $170 billion to $230 billion range.
Musk’s strategy appears to be a speed-at-all-costs approach. While traditional data center builds at this scale can take years, xAI has been hitting milestones in months, aiming to ensure Grok remains competitive with industry leaders such as OpenAI’s ChatGPT and Anthropic’s Claude.
Related content: Read TechRepublic’s analysis on why power is becoming the most valuable resource in AI data centers.
