Elon Musk's AI Startup xAI Expands Supercomputer

By Sheila Dang

(Reuters) – Elon Musk's artificial intelligence startup xAI plans to expand its Memphis, Tennessee supercomputer to house at least one million graphics processing units (GPUs), as announced by the Greater Memphis Chamber on Wednesday, to compete against rivals like OpenAI.

This expansion represents a major increase for the supercomputer known as Colossus, which currently operates with 100,000 GPUs to train xAI's chatbot, Grok.

As part of the expansion, Nvidia (NASDAQ: NVDA), which supplies the GPUs, alongside Dell (NYSE: DELL) and Super Micro, which assemble the server racks, will establish operations in Memphis, according to the chamber's statement.

Colossus plays a crucial role in advancing Musk's AI ambitions, particularly as he intensifies his competition with OpenAI and CEO Sam Altman. Last month, Musk expanded his lawsuit against the ChatGPT-maker, claiming that OpenAI and Microsoft (NASDAQ: MSFT) unlawfully attempted to monopolize the AI market.

However, the tenfold expansion of the xAI supercomputer may raise environmental concerns as activists and lawmakers have increasingly scrutinized data centers for their significant energy requirements. In August, the Southern Environmental Law Center urged local Tennessee officials to verify if xAI was utilizing gas turbines to help power its supercomputer without the necessary air permits.