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.
Key takeaways:
- Elon Musk's xAI is investing over $400 million to build a supercomputer data center in Memphis, but it faces challenges with electricity supply.
- xAI plans to use 1 million GPUs, but currently lacks sufficient power from the local grid and may need to build on-site power generation.
- The hardware costs for the GPUs, primarily Nvidia's H100 and H200 chips, could reach up to $27 billion for the planned scale.
- xAI has been supplementing its power supply with gas-powered generators and is seeking additional grid power, but infrastructure upgrades are necessary.