TITLE: xAI Buys Third Building to Expand AI Compute Power

xAI Expands Infrastructure with Third Building Purchase

Elon Musk announced on December 30, 2025, that his artificial intelligence startup xAI has acquired a third building to bolster its computational resources. The move is intended to increase training capacity to nearly 2 gigawatts of power, positioning xAI to challenge leading AI models like OpenAI's ChatGPT and Anthropic's Claude.

The company's flagship supercomputer, Colossus, located in Memphis, Tennessee, is described as the world's largest AI cluster. Musk shared the news on X, stating, "xAI has bought a third building called MACROHARDRR," a name that appears to reference Microsoft. He did not specify the building's location.

Property records and sources indicate the new facility is slated for development outside Memphis into a supersized data center. xAI plans to convert the warehouse starting in 2026, integrating it with expansions to Colossus, which aims to incorporate at least 1 million graphics processing units (GPUs).

Strategic Push in AI Competition

This acquisition highlights xAI's aggressive scaling efforts in the AI sector. Founded by Musk in 2023, the company has rapidly built infrastructure to train advanced language models. Colossus currently operates with significant GPU capacity, and the third building will support a second phase, known as Colossus 2.

The expansions are strategically located near a natural gas power plant under construction by xAI, along with other energy sources. This proximity addresses the immense power requirements of AI training, which can consume electricity equivalent to small cities.

xAI's growth occurs amid intensifying competition. OpenAI, backed by Microsoft, and Anthropic, supported by Amazon, dominate the generative AI landscape. Musk has criticized these rivals, particularly OpenAI, for shifting from nonprofit roots, prompting him to launch xAI as an alternative focused on understanding the universe.

Environmental and Energy Concerns

The rapid proliferation of AI data centers has sparked backlash from environmental groups. Critics argue that facilities like Colossus contribute to high carbon emissions and strain power grids. xAI's reliance on natural gas exacerbates these issues, as the fuel, while cleaner than coal, still produces greenhouse gases.

Activists have called for greater transparency and sustainable practices in AI development. In Memphis, local officials have expressed mixed views, balancing economic benefits—such as jobs and investment—with potential environmental impacts.

xAI did not respond to requests for additional details on the purchase or timeline.

Broader Industry Context

The AI infrastructure race extends beyond xAI. Competitors are also investing heavily: Microsoft has committed billions to OpenAI, while Amazon and Google expand their cloud offerings. Globally, AI's energy demands are projected to rival those of entire countries by 2030, prompting regulatory scrutiny in regions like the European Union.

In the U.S., the Biden administration has encouraged efficient AI development, though policy shifts under a potential future administration could influence funding and regulations. xAI's Memphis project, announced earlier in 2025, has already created hundreds of jobs and positioned the city as an AI hub.

This expansion underscores the sector's trajectory: innovation driven by massive capital, tempered by sustainability challenges.