Elon Musk's Colossus project runs short of electricity to power its proposed 1 million GPUs: Report

As a result, xAI can't serve customer needs "without additional on-site power generation," the company said in a permitting application.

Elon Musk's artificial intelligence (AI) startup xAI has invested over $400 million so far to build what it calls the world's largest supercomputer facility in Memphis, Tennessee, but it won't be able to get enough power from the local grid.

As of now, fourteen construction permit applications for the project have been filed since June 2024.(Representational Image/Pixabay)

As of now, fourteen construction permit applications for the project have been filed since June 2024, according to a Business Insider report.

xAI has requested 300 megawatts of grid power from Memphis Light, Gas and Water but has been approved for only 150 megawatts, according to the report.

As a result, xAI can't serve customer needs "without additional on-site power generation," the report quoted the company as having said in a permitting application.

Meanwhile, xAI has been supplementing its power supply with gas-powered generators from Caterpillar's subsidiary Solar Turbines, producing a combined 250 MW.

The "gigafactory of compute" currently has 200,000 Nvidia GPUs (H100 and H200) installed in just 122 days, with plans to run 1 million of them in the future. This came after xAI raised $12 billion in funding last year.

However, it would also need over 1 gigawatt of electricity to power these 1 million GPUs, according to the report which cited Shaolei Ren, an electrical and computer engineering professor at the University of California Riverside.

On top of this, the H100 chips cost between $27,000 and $40,000 per unit, and the H200s cost $32,000 per unit, meaning that hardware alone without the power expenses would cost upward of $4.3 billion now and $27 billion for 1 million GPUs at the price of the cheaper H100s, according to the report.

The Colossus project overall is estimated to cost roughly the same as estimates for prime competitor OpenAI's Stargate facilities in Texas, which is a joint venture between Oracle, OpenAI and SoftBank.