ELON Musk’s xAI plans to develop a new facility in Memphis to house a giant supercomputer, a move by the artificial intelligence (AI) startup to boost its capacity in the race to build and offer chatbots and other AI-powered tools.
Musk and his team at xAI have been working with officials in the Tennessee city since early March to plan the new factory, which would be the “largest multibillion-dollar investment in the city of Memphis’s history”, said Ted Townsend, president of the Greater Memphis Chamber, a local non-profit funded by the city’s private business community.
Many details about the new facility have yet to be disclosed, including the total cost and the number of jobs it will create, Townsend added. The city has also discussed offering xAI tax breaks or other business incentives to lure the project to Memphis, but those specifics are still pending, he added.
“We have work to do, make no mistake,” he said. “But we are really incredibly grateful for the interest from Elon and his executives and the xAI team.” The new site’s details were first reported by the Daily Memphian. Musk did not immediately respond to a request for comment on the plans.
Musk has made xAI a priority over the past year in an effort to keep up with competitors including OpenAI, Alphabet’s Google and Meta Platforms. The company’s main product, an AI chatbot called Grok, is available inside Musk’s social networking app, X. It was “designed to answer questions with a bit of wit and has a rebellious streak”, according to the product’s description. Musk has described Grok as being a counterpoint to “woke” AI chatbots from other companies.
To help build this vision, xAI recently announced US$6 billion in new venture capital funding that valued the company at more than US$24 billion, including the new investment capital. An investor presentation from May included mention of Musk’s plan for a “gigafactory of compute” and said he hoped to have it completed by the fall of 2025, according to The Information.
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Musk is not the only tech mogul eyeing Tennessee. Oracle chairman Larry Ellison – a friend of Musk’s and a former Tesla board member – said earlier this year that he planned to move Oracle’s corporate headquarters to Nashville. Amazon.com also has an office in Nashville with thousands of employees.
A spokesperson for Memphis Mayor Paul Young declined to elaborate on the xAI project’s cost, jobs and tax incentives, saying those details were “still in development”.
“We like to say that innovation is in our DNA – from the birth of the modern-day hotel, grocery store, and overnight delivery to groundbreaking medical discoveries, the blues and rock ‘n’ roll,” Young said. “We are a city of innovators, and it makes sense that Memphis feels like home to those seeking to change the world.” BLOOMBERG
