Microsoft, xAI Race to Build Gigawatt Datacenters

22 Sep 2025

Microsoft and Elon Musk’s xAI are racing to build massive AI datacenters that could define the next wave of model capability. Microsoft’s Fairwater campus in Wisconsin is a 315‑acre, 1.2M sq ft buildout slated for early 2026 with “hundreds of thousands” of NVIDIA GB200 GPUs, closed‑loop cooling, and fiber capacity the newsletter says could wrap Earth 4.5 times. Microsoft has also committed another $4B for a second similar site.

xAI is expanding its Memphis cluster into “Colossus 2,” billed as the first gigawatt‑scale data center. The piece reports xAI used cross‑border moves (acquiring a former Duke Energy plant) and temporary gas turbines to secure power, plus an $80M wastewater recycling facility to supply cooling. The newsletter frames these as infrastructure plays that enable ever‑bigger model training runs.

The dispatch also highlights model and industry moves: Grok 4 Fast and Grok Code Fast and their distribution (OpenRouter, GitHub Copilot, Cursor), pricing and context specs, and Musk saying Grok 5 may “reach AGI.” Other notes: NVIDIA “reverse‑acqui‑hired” Enfabrica execs to fix GPU networking, and OpenAI/Apple engineer recruiting for new devices. The piece emphasizes that who controls the infrastructure may shape AI’s near future.

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