Elon Musk’s  AI startup xAI is planning a data center project so massive that it’s hard to comprehend.

Musk’s AI vehicle is dropping more than $20 billion to build a colossal new infrastructure in Mississippi to expand its computing power.

Lately, we’ve seen Musk quietly shifting his focus away from Tesla’s (TSLA) core EV business, which continues to struggle with sluggish growth, pricing pressures, and relentless competition.

Instead, his attention has shifted to what he believes comes next.

He believes in autonomy, AI, and platforms that can efficiently scale far beyond just selling cars.

Musk shared his thoughts in the Tesla Q1 2025 earnings call.

The future of the company is fundamentally based on large-scale autonomous cars and large-scale, large volume, vast numbers of autonomous humanoid robots.

Those catalysts are why Wedbush’s Dan Ives slapped a Street-high $600 price target on the stock.

We believe Tesla could reach a $2 trillion market cap over the coming year.

If that future arrives, xAI could end up being Musk’s most important play.

xAI is building an AI production corridor, not just data centers

xAI’s expansion in the Memphis–Southaven region is part of a far-reaching, coordinated buildout that’s designed around scale, speed, and energy availability.

The massive $20 billion Mississippi data center project, called MACROHARDRR, is expected to pave the way for hundreds of permanent jobs across DeSoto County.

The Mississippi Development Authority has also already approved xAI for its Data Center Incentive, offering sales and use tax exemptions on equipment and software, along with support with fee-in-lieu agreements.

The sprawling Southaven facility is strategically situated near xAI’s newly acquired power plant site and is near its existing Tennessee data centers.

It’s also directly positioned alongside its flagship “AI factory,” Colossus, in the Memphis area, supporting nearly 200,000 GPUs, along with a stated roadmap of 1 million, The Valley City Times Record reported.

Once it’s all wrapped up, it could significantly boost the company’s total computing capacity to roughly 2 gigawatts, with operations set to begin as early as February.

Big AI players are making similar infrastructure bets

Clearly, xAI’s buildout is striking, but it’s part of a broader race among tech giants to secure the infrastructure needed to power the growing AI workloads.

• OpenAI’s Stargate Project: A plan envisioning up to $500 billion in U.S. AI data-center investment over four years, with $100 billion allocated for the initial phase, according to CNN.
• Microsoft and OpenAI “Stargate” supercomputer: A separate project that’s estimated to be at a whopping $100 billion, with a targeted launch near 2028.
• Meta’s Hyperion project: A $27 billion financing-backed data center in Louisiana that Meta Platforms describes as its largest globally, with capacity potentially extending to 2 gigawatts.

xAI turned distribution, compute, and capital into a single strategy

xAI is looking to position itself as a potent full-stack AI business, offering a one-stop covering models, distribution, and computing infrastructure.

Things went into overdrive last March, when Elon Musk bundled X into xAI in an all-stock transaction.

The deal valued xAI at a whopping $80 billion and X at $33 billion (roughly $45 billion factoring in debt). That power move gave xAI built-in distribution on a massive scale, transforming a platform feature into a standalone product with immense reach.