Governor Tate Reeves announces a $20 billion xAI project in Southaven – January 8, 2026. (Photo credit: DeSoto County News-MS Facebook)
xAI, the American artificial intelligence company founded by Elon Musk, is bringing a transformative data center project to Southaven, marking the largest economic development investment in Mississippi’s history. The project represents a corporate investment exceeding $20 billion and is expected to create hundreds of permanent jobs across DeSoto County, significantly strengthening the region’s role in the fast-growing technology sector.
The company has purchased and is retrofitting an existing building to house the new data center, which will operate under the name MACROHARDRR. The facility is strategically located near xAI’s newly acquired power plant site in Southaven and close to one of the company’s existing data centers in Tennessee. Once fully operational, the Southaven site will boost xAI’s total computing capacity to nearly two gigawatts, placing it among the most powerful AI computing systems in the world.
Beyond the scale of the investment, local leaders point to the long-term benefits the project will bring to the community. In addition to revitalizing existing infrastructure, the data center will generate substantial tax revenue to support public safety, education, health and human services, parks, and other essential city services. These revenues are expected to have a lasting impact on the quality of life for Southaven residents and the broader DeSoto County area.
To support the project, the Mississippi Development Authority has approved xAI for its Data Center Incentive program, which provides a sales and use tax exemption on computing and equipment software for certified data centers. The City of Southaven and DeSoto County are also backing the development through fee-in-lieu agreements, reinforcing the region’s commitment to attracting large-scale, capital-intensive technology investments.
Founded in 2023 and headquartered in Silicon Valley, xAI focuses on developing advanced artificial intelligence technologies with the mission of understanding the universe. The company operates across the AI, social media, and technology sectors and is best known for Grok, its generative AI chatbot integrated with the social media platform X. xAI also offers a range of application programming interface tools, including image generation, voice, and agent capabilities, as well as its xAI for Government suite designed for federal, state, and local government use. The company expects to begin data center operations in Southaven in February 2026.
State leaders say the announcement underscores Mississippi’s growing reputation as a destination for advanced technology projects. Governor Tate Reeves called the investment a defining moment for the state, saying, “This record-shattering $20 billion investment is an amazing start to what is sure to be another incredible year for economic development in Mississippi. Today, Elon Musk is bringing xAI to DeSoto County, a project that will transform the region and bring amazing opportunities to its residents for generations. This is the largest economic development project in Mississippi’s history. It sets the pace for continued high-tech investments across our state and strengthens Mississippi’s position as a leader in this exciting tech revolution.”
Elon Musk emphasized both the scale and speed of the expansion, noting the regional significance of the project. “xAI is scaling at an immeasurable pace — we are building our third massive data center in the greater Memphis area,” Musk said. “MACROHARDRR pushes our Colossus training compute to approximately two gigawatts, by far the most powerful AI system on Earth. This is insane execution speed by xAI and the state of Mississippi. We are grateful to Governor Reeves for his support of building xAI at warp speed.”
Mississippi Development Authority Executive Director Bill Cork said the project reflects years of focused economic strategy paying off. “Starting off 2026 with a $20 billion investment by xAI is a clear sign Mississippi is not letting up on the economic momentum we have built over the last few years,” Cork said. “Our focus on speed, certainty and readiness allows companies to move quickly and with confidence, while also enabling Mississippi to compete for capital-intensive, advanced technology projects like xAI. These investments bring new, high-quality jobs to the people of Mississippi and place our state at the center of the ‘Digital Delta.’ We are proud to partner with the xAI team as we continue building the future of tech innovation right here in Mississippi.”