Elon Musk’s Mad Dash To Build A Giant xAI Supercomputer In Memphis

Forbes

Elon Musk is “hauling ass” on his “Gigafactory of Compute” project in Memphis. But a whiplash deal, NDAs, and backroom promises made to the city have lawmakers demanding answers.  Read the full story on Forbes: https://www.forbes.com/sites/sarahemerson/2024/07/17/inside-elon-musks-mad-dash-to-build-a-giant-xai-supercomputer-in-memphis/#:~:text=Musk%20has%20claimed%20the%20supercomputer,has%20asked%20to%20construct%20itself.  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, inside Elon Musk's mad dash to build a giant XAI supercomputer in Memphis.

00:09As Ted Townsend tells it, Elon Musk took roughly a week to decide to build the new supercomputer for his AI startup, XAI, in Memphis.

00:18After a whirlwind few days of negotiations in March, Musk and his team, which included representatives from several of his companies,

00:26opted for the Tennessee city because it offered ample access to power and the ability to build quickly.

00:32This according to Townsend, who's the president of the Greater Memphis Chamber, an economic growth non-profit that worked on the deal.

00:39XAI's contractors refer to the project as Project Colossus, and Townsend recalls Musk's saying of the project, quote,

00:46We're going to haul ass in Memphis.

00:49The project shares its name with the 1970 film Colossus, the Forbin Project, about an out-of-control AI that was given control of the United States' nuclear arsenal.

00:59In the official trailer for the film, the narrator says,

01:04Colossus sees all, senses all, knows all, controls all armaments and defenses.

01:09When this emotionless creation becomes the master of man, the result is catastrophic.

01:15The multi-billion dollar investment, according to Townsend's estimate, was officially announced last month.

01:21But several members of the Memphis City Council are now urging the city to pump the brakes on the effort

01:26amid an upwelling of community concern about the secretive nature of the deal

01:30and the data center's requirements for electricity and water use.

01:34The council members alleged earlier this month at a public session that they were sidelined from the decision-making process,

01:40which was negotiated under NDA by Musk's team, the chamber, and local utilities and contractors

01:46months before the data center's details were ever presented to them.

01:50The mayor's office and XAI did not respond to requests for comment.

01:55During a recent city council session referring to the supercomputer project,

01:59council member Rhonda Logan said, quote,

02:10Council member Pearl Walker told Forbes that the development has caused, quote,

02:17At a Wednesday morning public meeting held by the city's utility Memphis Light, Gas & Water, she said, quote,

02:24They're afraid of what's possibly going to happen with the water, and they're afraid about the energy supply.

02:29Memphis has had a history of bad deals, and it is very important that this is a good deal for Memphis.

02:34We have to do our due diligence and insist on things that are in our interests and good for us.

02:40After the whiplash deal was finalized in March,

02:43construction began almost immediately on Musk's new so-called, quote,

02:48The supercomputer will be used to train XAI's chatbot Grok,

02:52a chat GPT competitor that has increasingly occupied the multi-company billionaire's attention.

02:58Musk recently troubled shareholders of his electric car company Tesla

03:02when he redirected shipments of valuable AI chips from Tesla to the generative AI startup he founded in March 2023.

03:09The next version of Grok will be trained on 100,000 NVIDIA H100 chips,

03:14Musk said last month, shortly after announcing that Dell and Supermicro will be providing the server racks.

03:21Rumors of XAI's data center have been circulating for months,

03:25fueled by Musk's May assertion that he would personally ensure the development of the supercomputer,

03:30this according to a report from the outlet The Information.

03:33By then, XAI had already approached Memphis developers and utility officials about locating its data center in their city.

03:41Townsend told Forbes that XAI was in talks with seven or eight other sites before choosing Memphis.

03:47Since March, Townsend's team made what he called an Avengers Assemble effort to, quote,

03:55He said that several chamber executives who negotiated the deal

03:58accepted Musk's invitation to tour a Tesla factory in Texas during the deliberations.

04:03He told Forbes, quote,

04:05They were courting us as much as we were courting them.

04:09XAI has made verbal pledges to improve Memphis' public infrastructure in support of the data center's development,

04:16a new power substation and a greywater processing facility.

04:20XAI has proposed building both facilities itself,

04:23though the city's utility has said no contracts exist for these commitments.

04:28For full coverage, check out Sarah Emerson and Emily Baker White's piece on Forbes.com.

04:35This is Kieran Meadows from Forbes. Thanks for tuning in.

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