xAI Quietly Builds 'Quintillion-Scale' Data Center in Atlanta, Partnering with X to Create AI Computing Juggernaut

xAI Quietly Builds 'Quintillion-Scale' Data Center in Atlanta, Partnering with X to Create AI Computing JuggernautArtificial intelligence startup xAI is expanding its computing infrastructure at an unprecedented pace. Following the "Megastructure" project in Memphis, xAI was revealed on February 21, 2024, to be secretly constructing a massive data center in Atlanta, further solidifying its competitive position in the AI landscape

xAI Quietly Builds 'Quintillion-Scale' Data Center in Atlanta, Partnering with X to Create AI Computing Juggernaut

Artificial intelligence startup xAI is expanding its computing infrastructure at an unprecedented pace. Following the "Megastructure" project in Memphis, xAI was revealed on February 21, 2024, to be secretly constructing a massive data center in Atlanta, further solidifying its competitive position in the AI landscape. This new data center is a collaborative effort between xAI and Elon Musk's social media platform, X, operating as a joint venture. This partnership not only showcases Musk's strategy of integrating resources for synergistic development but also highlights xAI's unwavering commitment to building powerful AI computing capabilities.

Under an agreement signed between xAI, X, and Develop Fulton, the Atlanta economic development agency, the data center will deploy approximately 12,000 NVIDIA-designed Graphics Processing Units (GPUs), the core components of AI computation and crucial for xAI's ambitious AI projects, such as its chatbot, Grok. In December, the parties agreed that Develop Fulton would finance the $700 million in chips, cabling, and other equipment through municipal bonds. Currently, representatives from X and xAI have not publicly commented on the matter.

The scale and computing power of the Atlanta data center are remarkable. An AI hardware specialist and data center solutions architect from Fulton County described it as a "quintillion-scale" data center capable of computing "trillion-parameter AI," rivaling the computing power of hyperscale cloud providers like Google or Amazon. However, it is smaller than Musk's self-proclaimed "world's largest data center," the Memphis "Megastructure" project, which is significantly larger, more energy-intensive, and has drawn attention for its potential water usage issues.

The Atlanta data center is projected to deploy approximately 12,448 NVIDIA GPUs, mostly Hopper architecture H100 GPUs, with a smaller number of lower-performance A100 GPUs. Each rack with 8 H100 chips costs between $277,000 and $500,000; each rack with 8 A100 chips costs $147,000. X provided all the A100 chips and 11,000 H100 chips, while xAI supplied the remaining H100 chips and NVIDIA Mellanox switches and optical moduleshigh-bandwidth networking equipment that significantly improves inter-chip coordination efficiency. Notably, unlike the Memphis project, the Atlanta data center's GPUs will not require liquid cooling, avoiding controversies related to water consumption.

Of the $700 million investment in accelerated computing hardware, X contributed $442 million, and xAI contributed $258 million. Develop Fulton projects that the two companies will receive approximately $10 million in tax breaks over ten years, allocated proportionally to their hardware investments. Kwanza Hall, chairman of the Develop Fulton board, stated that they estimate the project will generate over $241 million in overall economic impact. The data center architect estimates the Atlanta facility will require approximately 20 megawatts of power, readily supplied by the existing grid, a stark contrast to the Memphis "Megastructure's" 150 megawatts and a testament to xAI's accumulated experience and technological optimization in data center construction.

Documents indicate the Atlanta data center's objective is "to develop and train AI products," directly serving the development of large language models and semantic search products for the X platform. This further confirms the close collaboration between xAI and X and their strategic synergy in the AI field.

According to LinkedIn data, X employs approximately 16 people in the Atlanta area, while xAI has one employee at the Georgia facility, with two more listed as "X collaborators." The agreement indicates the facility will retain 24 existing positions but will not add new jobs. This lean team size reflects xAI's efficient operating model and suggests their optimized use of technology and resources.

xAI's ambitions extend far beyond this. Musk aims to establish xAI as a major competitor to OpenAI and Google, even drawing technical talent from Tesla. The company's construction of the Memphis data center in 122 days sets a record for similar-scale projects, showcasing xAI's execution capabilities. xAI reportedly hired hundreds of data labelers last year to train Grok and plans to expand to thousands in the coming months. Musk's ambition is also reflected in his attempted acquisition of OpenAI. In February, Musk and other investors submitted a $97.4 billion offer to acquire the non-profit that controls OpenAI, but the bid was ultimately rejected due to OpenAI's refusal to sell. OpenAI CEO Sam Altman clearly stated that the company would not sell, noting that Musk is a competitor aiming to win the market by creating better products.

xAI's construction of a new data center in Atlanta, in close partnership with X, marks a significant step in its AI competition. The "quintillion-scale" computing power, combined with deep integration with the X platform, will further drive breakthroughs in AI technology research and product applications, positioning xAI strategically in its competition with giants like OpenAI and Google. xAI's expansion and technological innovation deserve continued attention.