Elon Musk’s artificial intelligence startup xAI is reportedly planning to build a multi-billion dollar supercomputer in Memphis as part of an effort to better compete with rivals such as OpenAI and Google.
Musk and his xAI team have been in talks with Memphis officials since March about building a facility to house the data center, which is scheduled to be operational by next fall. According to Bloomberg News.
The planned supercomputer will be equipped with 100,000 Nvidia H100 graphics processing units (GPUs) and will be used to train the latest version of xAI’s chat bot Grok.
xAI currently rents about 16,000 Nvidia H100 GPUs from Oracle Cloud. News of Musk’s supercomputer plans came on Tuesday. The Information reported.
The H100 is a chip manufactured by Nvidia.
It is considered the most powerful GPU chip on the market and is specifically designed for AI applications.
Ted Townsend, president of the Greater Memphis Chamber of Commerce, told Bloomberg News that the planned supercomputer would be “the largest multi-billion-dollar investment in the history of the city of Memphis.”
Townsend declined to say how many jobs the project will create or how much it will cost in total, but added that the city of Memphis is offering xAI tax credits and other incentives to build it.
“Definitely, we have work to do,” he said.
“But we’re really grateful for the interest from Elon and his leadership and the xAI team.”
News of Musk’s Memphis plans First reported by The Daily MemphianThe Post has reached out to Mr X for comment.
Memphis Mayor Paul Young declined to provide details about how much the xAI supercomputer would cost or how many jobs it would create, saying only that the details were “still being developed.”
“I often say that innovation is in our DNA – from the birth of the modern hotel, grocery store and next-day delivery to groundbreaking medical discoveries, the blues and rock and roll,” Young said in a statement shared with Bloomberg.
“We’re a city of innovators, so it’s only natural that Memphis feels like home for people looking to change the world.”
Tennessee has become a popular destination for companies looking to lower the cost of living for their employees and save on taxes.
Oracle, whose chairman is Musk’s friend Larry Ellison, announced plans earlier this year to move its headquarters from Austin, Texas, to Nashville.
The move comes just a few years after Ellison moved Oracle’s headquarters from Silicon Valley to the Texas capital.
Amazon also has an office in Nashville, where thousands of employees work.
Earlier this week, CNBC reported that Musk had instructed Nvidia to prioritize shipments of AI processors to its own X and xAI companies over electric car maker Tesla.
“Elon prioritized the deployment of X’s H100 GPU cluster rather than Tesla by redirecting 12,000 of the shipped H100 GPUs originally destined for Tesla to X,” an internal Nvidia memo from December read, according to a CNBC report.
The news suggests Musk is prioritizing artificial intelligence-related developments outside Tesla and comes ahead of a key shareholder vote on a $56 billion compensation package at the company.
The billionaire is also working on AI development with X and xAI for applications such as the chatbot Grok.
XAI, which Musk launched in 2023 to compete with ChatGPT developer OpenAI, raised $6 billion in funding last month.
Tesla shareholders are scheduled to vote on June 13 on Musk’s compensation package, which would be the largest for a US corporate CEO.
