xAI’s Fast, Cheap Data Center Build-Out Has Hidden Costs

SpaceX is touting xAI’s ability to build data centers quickly and cheaply as a major advantage over rival AI labs, part of a pitch for its upcoming initial public offering.

For instance, in SpaceX’s draft IPO prospectus, the company said xAI brought the first two chip clusters at its second data center online at roughly a quarter of what it typically costs in the data center industry. But that speed and low up-front costs come with trade-offs, including reliability problems with xAI’s temporary power and cooling setups that could add costs over time.