By Evgenia Filimianova

Elon Musk’s artificial intelligence startup xAI plans to invest more than $20 billion to build a large data center in Southaven, Mississippi, marking the largest economic development project in the state’s history, Gov. Tate Reeves said on Jan. 8.

The investment is set to create hundreds of jobs and boost local tax revenues, the governor’s office said in a statement, announcing the project.

Musk’s company purchased and is retrofitting an existing building in Southaven to house what will be known as the MACROHARDRR data center, Mississippi officials said.

Musk said he was “excited to invest in Mississippi” in a Jan. 9 post on X.

The facility is located near a power plant site recently acquired by xAI and close to one of the company’s existing data centers in Tennessee, positioning the project within the greater Memphis regional power and logistics corridor.

“This is the largest economic development project in Mississippi’s history. It sets the pace for continued high-tech investments across our state and strengthens Mississippi’s position as a leader in this exciting tech revolution,” Reeves said.

Once completed, the data center is expected to increase the company’s total compute power to nearly 2 gigawatts, a scale that places it among the largest AI computing installations globally.

“MACROHARDRR pushes our Colossus training compute to 2GW—by far the most powerful AI system on Earth,” Musk said in a statement, released by Reeves’s office.

Operations in Southaven are expected to begin in February, according to a project fact sheet released by the state.

Reeves’s administration said the investment would generate long-term tax revenue to fund public services, including education, public safety, health care, and local infrastructure.

“This record-shattering $20 billion investment is an amazing start to what is sure to be another incredible year for economic development in Mississippi,” Reeves said.

He added in a Jan. 8 post on X that Mississippi’s advantage lay in how quickly projects could move from approval to operation. This was echoed by Musk, who thanked Reeves for the support in “building xAI at warp speed.”

Broader AI Expansion

Founded in 2023 and headquartered in Silicon Valley, xAI develops AI systems aimed at scientific discovery and advanced reasoning. Its flagship product is Grok, a generative AI chatbot integrated with Musk’s social media platform X.

The company also offers application programming interface tools, including image generation and voice services, as well as an “xAI For Government” suite designed for U.S. federal, state, and local agencies.

Mississippi Development Authority Executive Director Bill Cork said that the scale of the investment reflects the state’s growing competitiveness in advanced technology projects.

“Starting off 2026 with a $20 billion investment by xAI is a clear sign Mississippi is not letting up on the economic momentum we have built over the last few years,” Cork said.

He added that Mississippi’s emphasis on “speed, certainty, and readiness” has allowed it to compete for large, capital-intensive projects that bring high-quality jobs.

“These investments place our state at the center of the ‘Digital Delta,’” Cork said.

The Southaven project comes as xAI expands its footprint beyond commercial applications. The Department of War announced on Dec. 22, 2025, that it plans to integrate xAI’s Grok-based models into its GenAI.mil platform, according to a Pentagon statement.

Under the partnership, xAI’s models will be available to uniformed and civilian personnel for handling controlled unclassified information, materials that are not classified but are restricted from public release. The Pentagon said the integration is expected to begin early this year.

The War Department said the partnership reflects growing interest in deploying commercial AI tools across government operations, even as concerns persist about data security, energy consumption, and the concentration of computing power.