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Elon Musk's xAI Powers Up with Tesla Megapacks for AI Revolution in Memphis

Word on the StreetWednesday, May 7, 2025 10:00 pm ET

1min read

Elon Musk's xAI is utilizing Tesla's (TSLA.US) Megapack batteries to support its "Colossus" supercomputer based in Memphis, marking another instance of synergy within Musk's business conglomerate.

The Greater Memphis Chamber announced on Wednesday that the system has integrated Megapack batteries to address power outages and spikes in demand. The business group noted that the xAI project has recently linked to a new substation capable of delivering 150 megawatts of electricity.

Musk's AI startup swiftly moved forward, constructing the facility in two phases, while facing criticism from environmental groups for employing natural gas turbines. As the first phase concludes, a section of these turbines will be dismantled.

The utilization of 150 megawatt Megapack underlines the collaboration among Musk's five companies. Tesla's recently submitted documents reveal that from January 2024 to February of this year, xAI has invested approximately $230 million in Megapacks. Musk also heads SpaceX, Neuralink, and the Boring Company.

While Tesla is renowned for its electric vehicles, it is not merely an automotive company. Tesla’s mission is “to accelerate the world’s transition to sustainable energy,” and amidst a decline in car sales, its energy division is perceived as a burgeoning business.

Utility-scale batteries like Megapacks are essential for storing electricity generated from wind and solar energy, offering substantial profit potential. By storing surplus electricity during periods of low prices and demand, battery owners can sell power back to the grid when prices surge.

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