SpaceX Pays $185M in Memphis for 1st xAI Data Center

SpaceX has paid $185 million for a 785,000-square-foot data center in Memphis, Tenn. This marks xAI’s first data center. An Affiliate of Phoenix Investors sold the asset at 3231 Paul R. Lowry Road.

The property previously traded in December 2023, when the Phoenix Investors affiliate acquired it from Electrolux, for $35 million, Yardi Matrix data shows.

The home appliance company used the space as a manufacturing facility until 2022, when it ceased production and moved its operations to Springfield, Tenn. At the time, the deal also involved a 580-acre parcel.

Dubbed Colossus I, the property occupies 217 acres within the Southwest submarket, having easy access to interstate 55, 69 and 240. The city’s downtown area is within 12 miles, while Memphis International Airport is 15 miles away.

Completed in 2013, the facility will house xAI’s flagship AI training supercomputer, Colossus. The building has seven dock-high loading doors and nine drive-in doors, as well as 62 truck wells.

SpaceX continues southern expansion

SpaceX acquired xAI back in February this year in a deal valued at $125 billion. The subsidiary was initially part of X, formerly known as Twitter, with Grok being its main product.

At the beginning of this month, a joint venture between SpaceX, Tesla and xAI proposed a location for its $55 billion manufacturing campus, near College Station, Texas. Dubbed Terafab, the facility will produce chips for 1 terawatt of computing power annually. Local officials are set to hold a meeting next month to consider a tax abatement.