Elon built a power plant in Mississippi to run computers in Tennessee. They're a few hundred feet apart. The state line between them is doing all the work.
Here's the trick. Air permits come from state regulators. Memphis fought his turbines for a year. So he put the new ones just over the line in Southaven, where Mississippi approved all 41 of them three weeks after the public hearing. Unanimous vote.
The computers stayed in Memphis, because Tennessee has some of the cheapest power in America. Then Mississippi handed him the biggest deal in state history to get the next building. $20 billion, and he pays zero sales tax on the chips inside it.
Add it up. Turbines where the permits come easy. Servers where the power comes cheap. GPUs where the tax is zero. Every piece of the project sits in whichever state charges less for it.Neither state got the whole thing. Both gave him their best offer anyway.The power plant makes half as much electricity as Hoover Dam. And the extension cord crosses a state line.
Aakash Gupta's post explains xAI's cross-border setup for its Colossus AI supercluster: gas turbines in Southaven, Mississippi for fast air permits (41 approved in weeks after Memphis delays), compute servers in Memphis, Tennessee for cheap TVA power, and major tax breaks including zero sales tax on chips in Mississippi.
The ~1.2 GW on-site power plant, roughly half Hoover Dam's capacity, uses transmission lines crossing the state line to optimize costs and speed, showcasing regulatory and economic arbitrage between adjacent states.
This approach highlights how differing state rules on permitting, electricity pricing, and incentives enable rapid scaling of AI infrastructure, though it has drawn local environmental scrutiny over emissions and temporary turbines.
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