XAI plans to lease 552 acres for Memphis expansion
Tesla and SpaceX Chief Executive Officer Elon Musk speaks at a conference Monday, March 9, 2020. (Susan Walsh/AP file)
CTC Property, a subsidiary of xAI, plans to enter into a 21-year lease for 552 acres of Memphis and Shelby County Port Commission land in Memphis.
A person familiar with the matter said the land would be used for future development for xAI and allow the company to build on its ongoing momentum in Memphis.
The source close to the matter said the expansion would allow the company to expand its Memphis data center footprint and office space, add technology and engineering hubs, deploy additional megapacks and build a continuing education center.
The company, founded by Elon Musk, recently announced that it would double its Memphis footprint. The expansion news Wednesday shows the leased acreage could allow the company to grow in Memphis at least three or four-fold.
The lease terms were released Wednesday, Oct. 2, as part of the Memphis and Shelby County Economic Development Growth Engine’s agenda for a special meeting Friday, Oct. 4.
The annual rent would be $1.65 million, due for a 2.5% increase annually. The monthly rent would be $137,913. The term sheet is addressed to Brent Mayo, the site build and infrastructure senior manager.
The company would have the option to buy the land for $23.6 million after the 22nd year.
Power needs would grow
With the expansion to phase two, the data center’s power needs would grow to 276 megawatts by November or early December.
A person familiar with the matter said that it was unclear with the future expansion how much the company’s power needs would grow. The company is awaiting engineering plans.
However, they said the company would be 100% interruptable by Tennessee Valley Authority within 30 minutes of TVA telling industrial users to conserve power.
Due to the company’s existing plans to build a greywater plant for industrial cooling, the planned expansion will not add any constraint to the Memphis Sand Aquifer.
The land in question is south of the facility on Paul R. Lowry Road.
Company considered Haywood County
A person familiar with the matter said xAI chose to expand in Memphis because of its existing relationships with city officials.
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Samuel Hardiman
Samuel Hardiman is an enterprise and investigative reporter who focuses on local government and politics. He began his journalism career at the Tulsa World in Tulsa, Oklahoma, where he covered business and, later, K-12 education. Hardiman came to Memphis in 2018 to join the Memphis Business Journal, covering government and economic development. He then served as the Memphis Commercial Appeal’s city hall reporter and later joined The Daily Memphian in 2023. His current work focuses on Elon Musk’s xAI, regional energy needs and how Memphis and Shelby County government spend taxpayer dollars.
Sophia Surrett
Sophia Surrett is a University of Alabama graduate, where she received her B.A. in news media and M.A. in journalism and media studies. She covers small business, nonprofits, restaurant real estate, hospitality and tourism, manufacturing, and transportation and logistics.
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