As SpaceXAI continues expanding in the Mid-South, the company's development plans are interconnected between Shelby County in Tennessee and DeSoto County in Mississippi.
The artificial intelligence data center development is an interstate project, which complicates an already multilayered project — and that's not including several ongoing lawsuits involving SpaceXAI.
Following SpaceXAI's first data center, Colossus, in Memphis. The company expanded into Memphis' Whitehaven neighborhood, where its second data center, Colossus 2, is located at 5420 Tulane Road.
Incentives at Southaven plant
Colossus 2, however, is powered by a power plant located across state lines in Southaven, Mississippi. That project has drawn significantcriticism from residents and environmental advocacy
groups since SpaceXAI affiliate MZX Tech LLC, purchased the former Duke Energy plant at 2875 Stanton Road in July 2025.
To date, MZX Tech LLC has received two incentives for its DeSoto County expansion. In November 2025, the Mississippi Development Authority approved a tax incentive for a $900 million investment at the former Duke Energy plant at 2875 Stanton Road. Under the agreement, the power plant would be reactivated to provide 400 megawatts to 1.2 gigawatts of power. The incentive agreement outlines a minimum requirement for 10 new jobs.
In August, during a SpaceX quarterly earnings call, Elon Musk announced plans for the company to meet 20 gigawatts of electricity demand, with 15 gigawatts coming from the SpaceX AI power plant. Currently, that power plant is the Stanton Road facility in Southaven.
In January 2026, the Mississippi Development Authority approved a tax incentive for a $20 billion investment and a minimum of 20 new jobs at the Macrohardrr data center site at 2400 Stateline Road.
The Commercial Appeal obtained both Mississippi Development Authority incentive agreements via public records requests.
Under state guidelines, Mississippi has significantly lowered the barrier of entry for data center development, requiring a minimum of $20 million investment and 20 full-time jobs with an average wage of $49,700. (The reduction in minimum capital investment from $50 million to $20 million was made in 2019.)
Shelby County incentives, property taxes
To date, SpaceXAI and its affiliates have not received any tax incentives or payment-in-lieu-of-taxes (PILOT) programs for their Memphis-based developments.
In October 2024, SpaceXAI affiliate, CTC Property LLC, entered into a 21-year lease with the Economic Development Growth Engine for Memphis and Shelby County (EDGE) for 522 acres southeast of the Colossus data center at 3231 Paul R. Lowry Road. In September 2025, CTC Property announced plans to sublease that land to Chattanooga-based Seven States Power Corp. for a 100-megawatt solar farm; along 100-megawatts of battery storage.
However, those plans are in question following theSeven States Power Corp. and Memphis Light, Gas and Water (MLGW) partnership to add 100 megawatts of capacity to the MLGW grid. The MLGW and Seven States partnership is using the same federal funding as proposed in the September sublease agreement.
Outside of the land lease agreements with EDGE, SpaceXAI and its affiliates are also covering the cost of the proposed $80 million Colossus Water Recycling Plant. The greywater plant is expected to reduce strain on the Memphis Aquifer by 9%; however, construction on the wastewater plant has been put on hold, with plans to restart in 2027.
To date, SpaceXAI and its affiliates have acquired over 800 acres of land in Shelby County (including all SpaceXAI properties in the region, the company's footprint is nearly the size of the University of Memphis' main campus).
Between SpaceXAI and its affiliates (MZX Tech LLC and CTC Property LLC), the company owes over $27.83 million in 2026 property taxes, according to records with the Shelby County Assessor's office.
In 2025, the Memphis City Council approved an ordinance proposed by Mayor Paul Young' administration to allocate 25% of the property taxes generated from SpaceXAI for reinvestment within the communities surrounding the data centers. Currently, Paul Young's administration is proposing that $3.25 million be allocated for several initiatives, including home repair and blight remediation.
SpaceX leasing business
Additionally, since SpaceXAI's parent company, SpaceX, has gone public the company's subleasing revenue strategy has been on public display.
SpaceX is leasing some of its compute capacity at the Colossus data center to Anthropic. That sublease is generating $1.25 billion a month, according to U.S. Securities and Exchange Commission (SEC) filings.
SpaceX is also leasing out capacity to Google and Reflection AI, according to CNBC reports. SpaceXAI's third data center, Macrohardrr, is expected to be online in 2027. That facility is located in Southaven, Mississippi.
Jobs total still murky
SpaceXAI representatives have not responded to inquiries from The Commercial Appeal for a specific total of full-time and temporary jobs created by the company's investments in Shelby County and DeSoto County.
The Mississippi Development Authority incentives only outline a minimum job creation total for full-time jobs. Since SpaceXAI has begun operations in Memphis, the total number of (temporary) construction jobs has been estimated in the hundreds to thousands.
On Aug. 20, during the quarterly Tennessee Valley Authority (TVA) board meeting, SpaceXAI energy and data center development lead Riley Trettel said the company has invested over $60 billion in its data center expansion while generating 6,000 construction jobs and 700 permanent jobs. Trettel's comments came during the public comment period of the TVA board meeting.
SpaceXAI and its affiliates also have several liens and lawsuits against them from contractors associated with the company's data center developments in Tennessee and Mississippi. This includes a $570 million lawsuit with Ohio-based contractor Darana Hybrid, which helped build the Colossus and Colossus 2 data centers.
Additionally, a wrongful death lawsuit was filed in September regarding a former employee's death during construction on Colossus 2.
Memphis City Council will also consider a temporary data center moratorium at the upcoming Oct. 6 meeting. The moratorium could impact future construction at SpaceXAI data center sites.
Currently, SpaceXAI has more than 60 positions listed on its website for Memphis and Southaven. Those positions include construction, hospitality, legal and recruiting roles.
Neil Strebig is a journalist with The Commercial Appeal. He can be reached at neil.strebig@commercialappeal.com, 901-426-0679
This article originally appeared on Memphis Commercial Appeal: Inside SpaceXAI's Mid-South footprint: Land, leases, incentives, jobs
