Memphis says xAI is using Tesla's 150MW Megapack batteries to shore up its Colossus supercomputer; xAI spent ~$230M on them from January 2024 to February 2025
Elon Musk's xAI is using Tesla Inc.'s Megapack batteries to shore up its “Colossus” supercomputer in Memphis …
Context & Ripple Effects
xAI’s Memphis buildout began with plans for a dedicated supercomputer facility and potential local incentives, then moved toward a tenfold Colossus expansion targeting more than 1 million GPUs. The battery deployment shows that electrical infrastructure was becoming part of the buildout alongside compute capacity.
The story also precedes later evidence of continued campus-scale expansion, including proposed large Nvidia procurement for Colossus 2. It matters because it puts a dollar figure on one non-GPU component required to operate concentrated AI compute.
First-order effects
- Tesla records roughly $230 million of Megapack sales to xAI over the stated period, while xAI gains 150MW of on-site battery capacity to support Colossus operations.
- Colossus’s infrastructure budget now visibly extends beyond servers and buildings to grid-facing power equipment.
Second-order effects
- xAI’s expansion plans require compute procurement and power resilience to be planned together; the later Colossus 2 chip-buying plan makes that coupling more consequential.
- Battery-storage suppliers gain a clearer AI-data-center customer case, while local power planning must account for large, concentrated loads with on-site storage.
Third-order effects
- If repeated across AI campuses, storage becomes a standard layer of the AI factory stack rather than an auxiliary facility purchase, tying data-center scaling more closely to utility infrastructure.
- The pattern may intensify scrutiny of how fast-growing AI sites secure power: storage can support operations, but it does not remove the broader permitting and supply constraints around new capacity.
The trend: AI compute campuses are evolving into integrated power-and-compute systems, with storage deployed alongside chips and facilities to manage increasingly concentrated electrical demand.