Elon Musk's new AI data center to cost $18 billion

Technology Oct 08, 2025

Elon Musk is setting up a massive new data center called "Colossus 2" in Memphis, Tennessee, to power his AI company xAI.
The facility is meant to match the 114-acre one already in operation and is planned to hold over 500,000 AI chips, but Musk still needs 300,000 more NVIDIA chips—costing about $18 billion—to get it fully running.

Colossus 2 will be as big as xAI's 1st site

Colossus 2 is designed to match the size of xAI's first Memphis center.
That earlier site caused higher utility bills and more pollution for nearby residents, with some calling their neighborhood a "sacrifice zone."
Even as xAI becomes Memphis's second-largest taxpayer after FedEx, locals are concerned about rising costs and environmental impact while construction pushes ahead.