xAI confirms Colossus 3 AI Supercomputer facility plans

xAI has announced the development of Colossus 3, a major expansion to its supercomputer infrastructure, as part of a $20 billion investment in Southaven, Mississippi. The announcement, made alongside Mississippi Governor Tate Reeves, marks the largest private-sector economic development project in the state’s history.

The facility will rebuild an 800,000-square-foot warehouse, formerly the GXO Distribution Center, into a data center. This initiative is expected to create hundreds of direct jobs statewide to advance xAI’s Grok AI models. No GPUs have been installed yet, with warehouse acquisition completed in December 2025 and conversion work set to begin in 2026.

Colossus 3 is the third site in xAI’s interconnected compute cluster, designed to operate as a cohesive system with a target of approximately 2 gigawatts of total power capacity across locations. The overall goal is to scale to at least 1 million GPUs, positioning the complex as the world’s most powerful AI training system. Current status across all sites includes around 450,000 GPUs.

Launched in late 2024, the Colossus 1 facility is located in Memphis, Tennessee, at a converted Electrolux factory. It houses hundreds of thousands of NVIDIA GPUs and serves as the foundation for the cluster. It was called the “Gigafactory of Compute” and Memphis’s largest capital investment by a new company at the time.

Colossus 2, also in the Memphis area at a site on Tulane in Shelby County, Tennessee, broke ground in mid-February 2025. xAI Memphis reveals that the site initially installed 110,000 NVIDIA GB200 GPUs, which were supported by Tesla Megapacks to ensure sufficient energy supplies.

Redundancies mirror those of Colossus 1 to prevent disruptions for residents. The facility was expected to come online shortly after a July 2025 update, with ongoing construction including gas turbines, cooling towers, and infrastructure expansions aimed at reaching 400 megawatts in the near term. A notable feature is the “MACROHARD” letters painted on the roof, visible from satellite imagery, highlighting the site’s scale.

The cross-border setup addresses power constraints, with a gigawatt-scale energy hub in Mississippi supporting Tennessee operations. This includes acquiring a decommissioned plant, installing turbines, and building substations to bypass grid delays.

xAI’s strategy emphasizes speed, repurposing existing structures and integrating solar elements, such as a planned 30-megawatt, 88-acre solar farm near Colossus 1 to cover about 10% of its 300-megawatt needs.

The recent $20 billion Series E round is allowing the company to expand its operations and buy new GPUs. For now, there are no announcements made regarding the operational capacity of the Colossus 3.

This is xAI’s new Colossus 3 building. Combined with Colossus 1 and 2, xAI’s total datacenter footprint is estimated at ~2.5M sqft. Together, the three sites will form a nearly 2GW supercomputer, with well over 1 million GPUs, likely costing over $35B combined.

Insane scale. pic.twitter.com/gsCfbZOc88

— Sawyer Merritt (@SawyerMerritt) January 8, 2026