Elon Musk's AI startup xAI will invest over $20 billion to expand a data center in Mississippi, marking the largest private investment in the state's history, according to Governor Tate Reeves.
Join me as we announce a record-breaking $20 billion investment in our state.
— Governor Tate Reeves (@tatereeves) January 8, 2026
Mississippi has momentum and THIS is our time! https://t.co/wf86VZ8snW
Last year, demand for data center capacity surged amid the AI boom, leading to issues in the energy systems of developed countries due to increased loads.
On December 30, Musk announced the acquisition of a data center named MACROHARDRR, presumably a tongue-in-cheek reference to Microsoft, as the term is an antonym to the company's brand with 'RR' added at the end.
The billionaire did not disclose many details, only stating that the facility will expand xAI's capacity to 2 GW.
According to Governor Reeves, the data center is located in Southaven, near a power plant recently acquired by the startup. Operations are expected to commence as early as February this year.
In September 2024, xAI launched the Colossus AI training cluster in Memphis, Tennessee, utilizing 100,000 Nvidia H100 GPUs, which was considered the largest in the world at that time. Environmental advocates accused the data center of worsening environmental conditions due to its use of gas turbines.
In January 2025, U.S. President Donald Trump announced private investments of $500 billion in AI infrastructure. Initial investments from a joint venture called Stargate, involving OpenAI, Softbank, and Oracle, were expected to be $100 billion, with plans to increase that amount. Experts expressed doubts about the initiative's ability to attract the claimed capital.
It is worth noting that the construction of the first Stargate data center complex, with a capacity of 1.2 GW, is expected to be completed by mid-2026. The facility will accommodate up to 400,000 powerful AI chips from Nvidia.