SpaceXAI’s Explores Texas Data Center, Oracle’s Costly Surprises, AI-Generated Movies Coming to Theaters

**Akash Pasricha** (0:13)
Welcome, everyone, to The Information's TITV. My name is Akash Pasricha. It is Wednesday, July 22nd. Today on the show, we have exclusive reporting that XAI, SpaceXAI's AI division, is working on a big new Texas data center.
We'll bring on our Elon Musk reporter with more details on that effort. We also have exclusive reporting on how Oracle's push to build new data centers is hitting roadblocks facing surprise costs and heavy red tape. We'll also take a look at how NeoCloud, General Compute is looking beyond NVIDIA as it seeks to build out its NeoCloud offering. To close out the show, we'll talk to the director and producer behind what could become the very first AI-generated movie to hit theaters. It's going to be a great show, so let's get right on into it.
SpaceXAI is working on a new data center in Texas. That is, according to exclusive reporting from my colleague Grace Kay, who covers all things Elon Musk. I want to bring on Grace to share more about what we know. Grace, welcome back to the show. It's great to have you here.

**Grace Kay** (1:15)
Thanks.

**Akash Pasricha** (1:16)
Okay. So what do we know about this data center that Elon Musk is building in Texas?

**Grace Kay** (1:22)
Yeah. So they've been talking about a data center expansion to Texas for a few months internally.
They've been exploring a few sites and are considering potentially building multiple data centers in the state, including building it from scratch as a green field project, and repurposing a warehouse, which is what they did for their first data center in Memphis.

**Akash Pasricha** (1:45)
Do we know how big this data center is supposed to be at all?

**Grace Kay** (1:49)
Yeah. So it's very early. So there's that caveat that this could change. But based on what I've heard from sources, they want to build this on the same scale as Memphis or potentially larger.

**Akash Pasricha** (2:01)
So we've talked about the Memphis facilities a lot on this show. I think there's one that's built and two more that's being built. Is that right?

**Grace Kay** (2:12)
Yeah.
They're all in various stages of being built. There's one that's fully operational, was built in about 122 days, which is kind of a record for the industry. But yes, they're spread out across Memphis and South Haven nearby.

**Akash Pasricha** (2:28)
And I mean, so this would be, I guess, the fourth facility that SpaceXAI would be working on.
I mean, let's talk about the demand for SpaceXAI products. I mean, Grok, I think you've reported as well that demand has been a little iffy on that front. So talk a little bit about how they're considering building all these facilities when it's looking a little iffy for Grok right now.

**Grace Kay** (2:57)
Yeah, I think we're seeing these compute deals with Anthropic and Google. And I think that's something that SpaceXAI has kind of realized is their secret sauce, is they're really good at building these data centers really quickly. Like I said, the 122 days for the first one was pretty unheard of in the industry. So I think they're seeing the capacity from other companies that are willing to pay large amounts of money to rent this compute. So yes, Grok maybe doesn't have as much demand as some of the other AI companies right now. But Elon Musk has indicated that they're going to continue to work on that. But also, there's a subset of the business where they can make a lot of money on their ability to build these data centers quickly.
Right.

**Akash Pasricha** (3:38)
I mean, they can make a lot of money, but it's kind of funny, like being a Neo Cloud, I don't think it was the vision for SpaceXAI to begin with. And so in some ways, I wonder why I keep going. I don't know. I wonder if people on the ground, if they're telling you, is this the new vision for the company? Really? Is it just something that they are pushing ahead with?
Because Elon is telling them to, like what's the strategy here?

**Grace Kay** (4:09)
Yeah. I mean, it's definitely part of the Elon Musk vision for the company. He has repeatedly told staff that how they're going to win the AI wars is by having the most compute.
And we've seen with other companies like Anthropic, compute constraints have led them to look elsewhere. So it is an advantage and it's something that Elon Musk is pursuing. But yes, it's very expensive to build these data centers also. So that's another factor.

**Akash Pasricha** (4:33)
Let's talk about the reaction to data centers. So in Memphis, there's been some backlash to these facilities getting built. Are we expecting some of that in Texas as well?