Colossus 2 Becomes Fastest Growing AI Data Center In The World

Building At Breakneck Speed

Elon Musk’s xAI is redefining the pace of data center development. In March, the company purchased a 1M SF warehouse in Memphis for its second Colossus AI cluster, reports Bisnow. Six months later, 200 MW of power is already up and running. Capacity has been secured to scale beyond 1 gigawatt in the coming months. If completed, it would become the largest AI-focused data center on Earth.

According to SemiAnalysis, the cluster’s rapid build-out is far faster than projects by Oracle, Crusoe, and even OpenAI, which typically take over a year to reach this level.

Controversial Power Moves

Speed has come at a cost. xAI’s power strategy has drawn legal challenges and environmental criticism. In May, the Southern Environmental Law Center revealed that xAI was operating 35 gas turbines at its original Colossus site. This far exceeded the 15 turbines it was permitted to use. The revelation prompted Clean Air Act violation claims and lawsuits from advocacy groups.

To bypass growing local resistance to fossil fuel generation, xAI acquired a former Duke Energy plant just across the border in Southaven, Mississippi. That facility, just 6 miles from Colossus 2, now runs seven natural gas turbines with the capacity to feed another 245 MW into the Memphis cluster — and potentially scale to over 1 GW.

Scaling Up — Fast

Colossus 2 is expected to cost tens of billions in total, with much of the spend going toward GPUs from Nvidia. xAI hasn’t yet secured all funding, but full GPU deployment is expected by early next year. xAI is relying on firms like Solaris Energy Infrastructure to supply additional power equipment needed to support the massive scale.

This marks the second major data center xAI has launched in Memphis. The first — a 300 MW facility built in just 122 days by retrofitting a shuttered Electrolux plant — is currently the world’s largest operational AI training cluster.

Race To The Top

xAI isn’t alone in building at scale. Microsoft just announced it’s nearing completion on its own massive data center campus in Mount Pleasant, Wisconsin. The 315-acre site includes more than 1M SF of data centers and a $3.3B investment, aiming to deliver performance 10x greater than the fastest supercomputer today.

Why It Matters

With AI models growing more compute-hungry, the demand for power-dense, high-capacity data centers is escalating. But as infrastructure races forward, so does scrutiny over the environmental impact and regulatory compliance. The Colossus 2 project highlights both the ambition — and the potential risks — of building the future of AI at unmatched speed.