xAI’s Next Phase Unleashed: The 2GW Supercomputer and the SpaceX Merger

I’ve been watching the AI sector for years, but what happened in early February 2026 has completely changed the game. If you thought the "Compute Wars" were just about having more GPUs, you were wrong. It’s now about power, orbital physics, and vertical integration at a scale we’ve never seen. With Elon Musk officially merging SpaceX and xAI this month, we are witnessing xAI's next phase unleashed—the birth of what he calls the "Innovation Engine."

This isn't just a corporate reshuffle; it's a strategic pivot that moves beyond terrestrial data centers into the vacuum of space. By combining the world's most advanced aerospace company with the fastest-growing AI startup, Musk is solving the two biggest bottlenecks in modern technology: energy scarcity and thermal management. In this deep dive, we explore how the expansion of the Colossus supercomputer and the SpaceX synergy are creating a trillion-dollar AI powerhouse.

1. The 2GW Powerhouse: Colossus Hits its Stride

The headline of 2026 is undoubtedly the expansion of the Colossus supercomputer in Memphis. As of February, xAI has secured a third building, known internally by the parody name "MACROHARDRR," and expanded the facility's total power capacity to nearly 2 Gigawatts (GW). To put that in perspective, 2GW is enough power to support roughly 1.5 million homes.

Musk isn't just building a computer; he's building a digital city. The sheer density of this facility allows for training cycles that were previously thought impossible. While other companies struggle with distributed clusters across multiple states, xAI has consolidated its power into a single, massive "AI Factory."

The Hardware Arms Race

The scale of this next phase is dictated by silicon. According to recent infrastructure reports, xAI’s current configuration includes:

555,000 NVIDIA GPUs: An $18 billion investment consisting of H100s, H200s, and the latest GB300 Blackwell Ultra chips. The Blackwell Ultra offers 1.5x more performance than the original Blackwell, enabling trillion-parameter models to reside entirely on-chip.
On-site Power Generation: To bypass the slow electrical grid, xAI is building its own natural gas power plants directly adjacent to the data centers. This allows the company to avoid "interconnection queues" that delay competitors by up to four years.
Liquid Cooling at Scale: At this power density, traditional air cooling is useless. The facility now moves over 50,000 gallons of water per minute, utilizing advanced Direct-to-Chip (DTC) cooling loops to keep the junction temperatures of the GB300s below 85°C.

2. The SpaceX Merger: Computing Beyond the Atmosphere

On February 2, 2026, the tech world was rocked by the announcement of a $1.25 trillion merger between SpaceX and xAI. This creates a vertically integrated innovation engine that controls both the "Brain" (AI) and the "Body" (the rockets).

But why merge them? The answer lies in Orbital Computing. Ground-based data centers are hitting a "Thermal Wall." In space, the vacuum provides a natural environment for radiative cooling, and the proximity to the sun allows for 24/7 solar power without atmospheric interference.

By using Starlink V3 satellites as edge-computing nodes, xAI can provide low-latency AI inference to any point on Earth. Imagine a world where your AI agent doesn't need to wait for a signal to reach a data center in Virginia; instead, it processes your request in the sky directly above you.

3. Grok 5: Towards Recursive Self-Improvement

The technical phase of xAI's next phase unleashed isn't just about hardware; it's about the intelligence it produces. Grok 5, expected to launch in mid-2026, is rumored to double the parameter count of Grok 4, reaching nearly 6 trillion parameters.

The most exciting feature of Grok 5 is its Agentic Autonomy. Most AI models today are reactive—they wait for you to ask a question. Grok 5 is being trained to be proactive. It can browse the web, write code, and execute workflows in the background. Musk has even assigned a 10% probability that Grok 5 could touch the fringes of Artificial General Intelligence (AGI).

The "Macrohard" Vision

Internally, the project is known as "Macrohard"—a direct challenge to Microsoft's partnership with OpenAI. The goal is simple: create an AI that can build other AI. This Recursive Training loop means that xAI can accelerate its progress exponentially, potentially leaving competitors in the dust by the end of the year.

4. Navigating the Challenges: Stability and Regulation

It hasn't all been smooth sailing. The scale of the merger has led to significant management overhauls. Recently, co-founders like Tony Wu and Jimmy Ba have departed, leaving only half of the original team. This "Talent War" is the biggest risk to xAI's timeline.

Furthermore, environmental groups in Memphis have raised concerns about the 2GW data center's impact on the local water table and power grid. To address this, xAI is investing heavily in Modular Nuclear Reactors (SMRs) for the 2027 roadmap to ensure zero-carbon emissions.

5. Resources for Further Reading

To verify the technical data and stay updated on the SpaceX IPO, I recommend these high-authority sources:

Final Verdict

We are no longer in the era of "chatbots." We are in the era of AI Infrastructure. By merging SpaceX and xAI, Elon Musk has created a company that owns the electricity, the rockets, the satellites, and the silicon.

As xAI moves into this next phase, the goal isn't just to be better than ChatGPT; it's to be the foundational operating system for the next century. Whether they succeed depends on how well they can manage the immense heat of 555,000 GPUs—both literally and figuratively.

Author Note:

This article was written after extensive research into the February 2026 xAI expansion and SpaceX merger filings. For real-time updates on the SpaceX IPO, follow our "AI Finance" category.

xAI's Next Phase Unleashed: 2GW Colossus & SpaceX Merger