Elon Musk and his company xAI are embarking on one of the largest AI infrastructure projects ever — an $18 billion investment to purchase hundreds of thousands of Nvidia GPUs for the new Colossus 2 data center in Memphis. According to the Wall Street Journal, the goal is to outpace competitors and secure dominance in AI infrastructure, though the project is already facing local opposition.
xAI plans to buy an additional 300,000 Nvidia chips, bringing the total to around 550,000. The enormous energy requirements of the center have prompted the company to invest $80 million in a wastewater recycling facility, which will process millions of gallons daily.
Locally, xAI has already become the second-largest taxpayer in Memphis, just behind FedEx, promising hundreds of jobs and transforming the city into a tech hub for the southern U.S. Construction on the infrastructure has already begun, with project completion planned for 2026.
However, Musk’s ambitious project has sparked strong reactions. Residents and environmental groups warn of enormous strain on the power grid, water consumption, and pollution, especially in poorer Black neighborhoods of Memphis. While some see an opportunity for a technological renaissance, others fear that “Colossus” could do more harm than good.
In brief: Tech World Highlights
- Meta has poached another prominent AI researcher from OpenAI, as Yang Song leaves to become lead researcher at MSL under Shengjie Zhao (also a former OpenAI employee).
- Tencent released open-source HunyuanImage 3.0, a new text-to-image generation model claimed to rival the best closed industrial alternatives.
- Google announced updates for its Gemini 2.5 Flash and Flash-Lite models, including improvements in agent tool performance, efficiency, and instruction-following.
- Exa introduced exa-code, a tool helping AI coding assistants find hyper-relevant web context to significantly reduce LLM hallucinations.
- New OpenAI Applications CEO Fidji Simo is reportedly recruiting a new executive to lead monetization and advertising efforts for ChatGPT.
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