Hajra Naz
Elon Musk’s AI startup, xAI, has been quietly establishing a major data center in Atlanta, expanding its operations beyond its existing facility in Memphis. The new data center will operate in collaboration with X (formerly Twitter), with both companies pooling resources to power AI advancements.
According to Business Insider, the facility will house approximately 12,000 Nvidia GPUs, which are essential for AI computation. This hardware is financed through a $700 million municipal bond agreement with Develop Fulton, an Atlanta economic development agency.
Inside xAI’s Atlanta Data Center
Industry experts suggest that the new facility boasts computing power comparable to those of tech giants like Google and Amazon. X representatives have labeled it an “exascale” data center, capable of handling “trillion-parameter AI.”
However, despite its impressive specs, the Atlanta center is still smaller than xAI’s Memphis project, Colossus, which Musk has described as the world’s largest AI data center.
Hardware Details
- The data center will feature 12,448 Nvidia GPUs, primarily Hopper-generation H100 GPUs, which cost between $277,000 and $500,000 per rack.
- Around 3% of the chips are Nvidia A100 GPUs, which are less powerful but still essential for AI training.
- X has contributed 11,000 H100 GPUs and all of the A100 GPUs to the project.
- The facility will also include Mellanox switches and optics, and high-speed networking equipment to enhance chip performance.
Unlike xAI’s Memphis center, this facility does not require liquid cooling, reducing the strain on local water resources.
Funding and Economic Impact
The total $700 million investment in AI hardware is split between:
- $442 million from X
- $258 million from xAI
The companies have secured tax abatements worth $10 million over 10 years, proportional to their contributions. Develop Fulton estimates that the project will generate an economic impact of over $241 million.
The facility is expected to consume around 20 megawatts of power, a manageable load for the Atlanta power grid. In contrast, xAI’s Memphis site has requested 150 megawatts from the Tennessee Valley Authority.
Read More: Elon Musk’s xAI Unveils Grok 3: The New Flagship Model
X and xAI: A Strategic Partnership
The Atlanta data center is another example of Musk leveraging his company’s resources to accelerate AI development. Records indicate that X provided 90% of the hardware, with xAI contributing the remaining 10%.
This collaboration follows xAI’s November 2023 launch of Grok, an AI chatbot integrated into X’s platform. Since then, xAI has evolved into an independent entity, recently releasing a more powerful version of Grok with 10 times the computing power of its predecessor.
The Atlanta facility will focus on training large language models and developing semantic search tools for X’s platform. Documents indicate that the center will maintain 24 jobs, but no new positions will be added.
Musk’s Bid to Compete with OpenAI and Google
Musk has been positioning xAI as a direct competitor to OpenAI and Google, even recruiting talent from Tesla. The Memphis data center was built in just 122 days, setting a record for a project of its scale. xAI has also been ramping up hiring, bringing in hundreds of data annotators to train its AI models.
In February, Musk and a group of investors offered $97.4 billion to acquire OpenAI’s controlling nonprofit, but later withdrew the bid. OpenAI CEO Sam Altman responded, saying:
“He’s obviously a competitor. He’s raised a lot of money for xAI, and they’re trying to compete with us. I wish he would just compete by building a better product.”
With its rapid expansion and aggressive AI development, xAI is quickly emerging as a formidable player in the AI industry. The new Atlanta data center is yet another step in Musk’s larger plan to challenge the dominance of OpenAI and other tech giants.
