Elon Musk's artificial intelligence startup, xAI, is investing over $400 million to build a supercomputer data center in Memphis, Tennessee. The project, which aims to become the "gigafactory of compute," involves installing 200,000 Nvidia GPUs with plans to scale up to 1 million. However, xAI faces significant challenges in securing enough electricity to power the facility, as the local grid cannot currently support the required capacity. The company is supplementing its power needs with gas-powered generators and has requested additional grid power, but infrastructure upgrades are necessary to meet the demand.

xAI has already spent $700 million on hardware for a separate data center in Georgia and is considering further expansion in Memphis, having purchased additional land for potential development. The Tennessee Valley Authority plans to invest $16 billion to address the growing power demand in the region, driven by xAI and other tech companies. Despite these efforts, powering 1 million GPUs would require over 1 gigawatt of electricity, posing a significant challenge for xAI's ambitious plans.