Elon Musk-owned artificial intelligence firm xai has acquired a 1-million-square-foot property in southwest Memphis, the Greater Memphis Chamber reported on Friday.

The move comes as the startup ramps up plans to expand its Colossus supercomputer—a key component in Musk’s strategy to enhance its AI infrastructure and compete with rivals like Openai.

According to the Chamber, the new property purchase builds on xai’s December announcement outlining an ambitious expansion to house at least one million graphics processing units (GPUs) as part of the Colossus project. The facility is expected to support the growing demand for AI computing power and is described as being “well on the path to the supercluster size” that xai envisions.

The investment is part of a broader trend in the tech industry where companies are scaling up their data center and supercomputing capabilities amid intensifying competition. However, the expansion of AI infrastructure has drawn criticism from environmental activists, who warn that data centers can consume large amounts of energy.

In related developments, the Memphis Chamber noted that xai’s new facility follows an $80 million water recycling plant and features the world’s largest deployment of Tesla Megapacks for data center operations. Additionally, it was reported on Wednesday that Tesla will soon break ground on a 1-million-square-foot factory in Texas to manage and store its Megapack energy products.

xai’s strategic expansion is seen as a significant step in Musk’s broader efforts to solidify his company’s position in the competitive AI landscape, particularly as tensions have risen with competitors in the sector.

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