Elon Musk's xAI to Build $20 Billion Data Center in Mississippi, Creating State's Largest Corporate Investment

xAI Announces Massive $20 Billion Data Center Project in Southaven, Mississippi

January 8, 2026

In a landmark move for the artificial intelligence and data center industries, Elon Musk's xAI has committed to a corporate investment exceeding $20 billion to establish a major new data center in Southaven, Mississippi. Announced by Governor Tate Reeves, this project stands as the largest economic development investment in the state's history, signaling a significant shift of high-tech capital and infrastructure into the region.

The announcement was made jointly by Governor Reeves and xAI in Southaven on Thursday. The AI company is retrofitting a purchased building to house the new facility, to be named "MACROHARDRR." Strategically located near a recently acquired power plant site in Southaven and an existing xAI data center in Tennessee, the project is expected to create hundreds of permanent jobs in DeSoto County.

Upon completion, the Southaven data center will be a cornerstone of xAI's computational ambitions. The company stated the facility will be "home to the world's largest computer, powered by Mississippi," and will increase its total computing capacity for AI model training to approximately 2 gigawatts. Elon Musk emphasized the project's scale and pace, stating, "MACROHARDRR pushes our Colossus training compute to ~2GW – by far the most powerful AI system on Earth." He credited the state's cooperation, saying, "This is insane execution speed by xAI and the state of Mississippi."

Governor Reeves hailed the record-shattering $20 billion investment as transformative. "This project will transform the region and bring amazing opportunities to its residents for generations," Reeves said. "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." Beyond job creation, the investment is projected to generate substantial tax revenue to support local public services, including education, public safety, and infrastructure.

The project benefits from Mississippi's Data Center Incentive program, which provides sales and use tax exemptions for qualified equipment, alongside local fee-in-lieu agreements from the City of Southaven and DeSoto County. This deal underscores the intense competition among states to attract capital-intensive AI infrastructure, which requires vast amounts of power and space. xAI's rapid expansion in the greater Memphis area highlights the growing importance of the Southeastern U.S. as a core hub for data center development driven by the AI boom.

Source: magnoliatribune