The Daily Planet #48: Hyperscaling, Part 3

Hyperscaling combines scale and speed and xAI (not surprising for an Elon Musk owned company) is pushing the limits of both. I am not a fan of the muskman but his operational chops have to be acknowledged.

xAI is ambitiously developing Colossus 2, a gigawatt-scale datacenter poised to surpass the capacity of Meta Superintelligence and Anthropic by Q3 2025. Starting in March 2025, xAI rapidly built 200MW of cooling capacity within six months at a massive Memphis site, with plans to expand power capacity to over 1.1GW through a strategic partnership with Solaris Energy Infrastructure. This partnership leverages gas turbines and Tesla Megapacks to ensure reliable, scalable energy supply, including a joint venture managing nearly 1.5GW of power infrastructure. The datacenter's design allows for ultra-high-density deployment, potentially doubling space by building vertically or expanding nearby, enabling xAI to host the world's largest single coherent AI training cluster.

To fund this massive build, xAI faces a capital requirement in the tens of billions of dollars. Potential funding sources include Saudi Arabia's Public Investment Fund, UAE state funds, and internal investments from Elon Musk's other ventures like Tesla and SpaceX. Elon Musk's strategic financial maneuvers and existing relationships in the Middle East are critical to securing this capital.

I don't know if xAI will ever eclipse OpenAI or Anthropic or Google, but if any American company had a shot at combining the compute and electric stacks, it would be xAI, seeing as it has SpaceX and Tesla as natural customers and allies.

xAI’s Colossus 2 – First Gigawatt Datacenter In The World, Unique RL Methodology, Capital Raise

Much has been written about xAI’s Colossus 1. The Memphis build belongs in the history books: the largest AI training cluster, erected from scratch in 122 days. With roughly 200,000 H100/H200s and …