Elon Musk’s xAI Buys Old Power Plant Site Near AI Data Center for $10

Elon Musk’s AI company, xAI, just made a major move to support its fast-growing tech empire. The company has purchased a 114-acre site in Southaven, Mississippi—formerly home to a Duke Energy power plant—just across the state line from its massive new data center in Memphis, Tennessee.

The sale price? Officially, just $10. But don’t let that number fool you.

What’s Really Going On With the $10 Deal?

In Mississippi, the law doesn’t require companies to publicly disclose real estate sale prices. That means the $10 figure is just a placeholder in public records. The real price hasn’t been revealed, but what’s clear is that this site could play a big role in powering the future of xAI.

The land was bought under MZX Tech LLC, a business tied to xAI and registered in the same California office as the company. It previously belonged to Julie M. James and once housed a natural gas power station that could produce up to 640 megawatts of energy.

Even though that power station has long been decommissioned, the site still includes some valuable infrastructure—like utility lines and gas connections that could feed into the nearby Memphis power grid.

Why xAI Bought It

xAI is in the middle of building what could become the world’s largest supercomputer. Called “Colossus,” the project will run on a staggering number of GPUs (graphic processing units)—the same kind of chips that power today’s advanced AI models.

By the time it’s finished, Colossus is expected to run 340,000 GPUs. Just the next phase alone will add 110,000 new chips to the system. All of this requires an enormous amount of electricity—so much that experts estimate the data center could use about one-third of Memphis’ current power supply.

Buying nearby land that used to be a power plant gives xAI more flexibility and control over how it powers its operations. Whether the company decides to rebuild energy production facilities or just use the site as a key connection point to the grid, it’s clearly part of a bigger plan to support its infrastructure needs.

Still a Lot of Mystery

So far, xAI hasn’t shared exactly what it plans to do with the Southaven property. Brent Mayo, the manager of xAI’s Memphis operations, said the company is still weighing its options. “Everything is still on the table right now,” he told reporters. He did confirm that the company is committed to growing alongside the Memphis community and bringing more jobs to the area.

There have also been hints that xAI is developing its own custom AI hardware. A recent job post mentioned “novel AI hardware architectures,” suggesting the company may be building its own chips—another move that would demand more power and more space.

What This Means for the Region

This latest land deal is part of a larger pattern. Tech companies are no longer just building data centers—they’re buying power plants, designing their own chips, and looking for any edge to support massive AI systems.

In Memphis and Southaven, this could mean more jobs, more construction, and more activity across the board. At the same time, some environmental and civil rights groups are keeping a close watch. xAI was recently permitted to install permanent natural gas turbines at its Memphis site, a decision that drew some pushback from local advocates concerned about pollution.

Whether the Southaven site becomes an energy hub or something else, one thing is clear: Elon Musk and xAI are planning far ahead, and they’re willing to buy big to make it happen.