Elon Musk's xAI To Take On Tech Giants Microsoft, Google, And OpenAI With Planned Memphis Supercomputer

Tesla and SpaceX CEO Elon Musk’s AI startup xAI is planning to construct a supercomputer in Memphis, Tennessee, to bolster its AI development efforts.

What Happened: The project is set to be located at an old manufacturing facility. The investment amount for the supercomputer is yet to be finalized, and the project is awaiting approval from local and regional authorities, reported The Wall Street Journal on Wednesday.

The city’s chamber of commerce president, Ted Townsend, stated that discussions with Musk and his team commenced in March following an inquiry about constructing the project in the city. He said swift action was necessary to secure the opportunity over competing cities.

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“The pace at which we were able to move resonated with the xAI team,” Townsend said. On Sunday, Musk also took to X, formerly Twitter, and said, “I had challah French toast for breakfast in Memphis.”

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Why It Matters: The proposed facility would significantly boost Musk’s efforts in the AI race, where he is competing with ChatGPT-parent OpenAI and tech giants like Alphabet Inc. and Microsoft Corporation to develop transformative technology. These companies have each committed billions of dollars to securing the data centers and chips essential for developing AI models.

Last month, xAI announced it had raised $6 billion, bringing the startup’s valuation to $24 billion. The company stated that the funds would be used to launch its first products, develop advanced infrastructure, and accelerate research and development of future technologies. Musk himself contributed $750 million to the investment, the report noted.

Currently, xAI depends on the cloud provider Oracle for operating the data centers used in training its technology and ranks as one of its top clients. The impact of the Memphis supercomputer on the partnership with Oracle remains uncertain.

Photo courtesy: Thomas Hawk on Flickr

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.