xAI, the AI company founded by Elon Musk, has recently acquired a substantial 1 million-square-foot property in Southwest Memphis, with the aim of expanding its artificial intelligence data center footprint, as announced by the Memphis Chamber of Commerce.

This new acquisition will be utilized to establish infrastructure that complements xAI’s existing data center in Memphis, further solidifying its presence in the region.

According to xAI senior site manager Brent Mayo, “The acquisition of this property ensures that xAI will remain a leader in AI innovation, right here in Memphis,” highlighting the company’s commitment to advancing its AI capabilities in the area.

Although the details of the expansion are not entirely clear, it is uncertain whether this move is related to a previously announced lease of a 522-acre site in Memphis, which had been reported earlier.

xAI’s appetite for AI hardware is substantial, as evidenced by its recent establishment of a second data center in Atlanta, equipped with $700 million worth of cutting-edge chips and equipment. Furthermore, the company has secured a deal with Dell to purchase $5 billion worth of GPU-packed servers, underscoring its aggressive expansion plans.

The primary function of xAI’s data centers is to train and operate its family of AI models, known as Grok. Notably, the company intends to upgrade its primary Memphis-based facility, called Colossus, to accommodate 1 million Nvidia GPUs by the end of the year, representing a significant increase from the 100,000 GPUs it had last year.

However, xAI’s continued expansion in Memphis has been met with criticism from some residents, who argue that the increased energy demands will strain the local grid and potentially exacerbate air quality issues in the area. In an effort to address these concerns, xAI has provided the local utility with discounted Tesla-manufactured batteries and constructed a water recycling plant.

To support its ambitious AI infrastructure projects, xAI is reportedly exploring a $10 billion funding round, which would value the company at $75 billion. This move comes after the company successfully closed its previous funding round of $6 billion in late 2024.