xAI bought jet engines for Colossus 2, but its legal power is cut in half by July 2027

The power that runs Elon Musk's AI cloud is on a deadline. On November 3 the New York Times reported, from state permits and satellite imagery↗, that xAIPVT$200B — xAI, private, latest valuation $200B has installed eight converted jet-engine turbines at the Southaven, Mississippi plant that feeds its Colossus 2 data center cluster near Memphis ⁷¹. ProEnergy rebuilt them from CF6-80C2 cores, the same engine that flew on Boeing▲+2.26% — Boeing, up 2.26 percent today 747s; each is rated 50MW in the state air permit, roughly 400MW together ⁷⁸.

xAI is now part of SpaceX▼−4.47% — SpaceX, down 4.47 percent today, and these sites are the foundation of the company's AI cloud. The engines buy speed, and the speed advantage expires on a schedule. A binding requirement signed July 30, 2026, a state order restricting which turbines may run and when↗, cuts the Southaven site's legal nameplate capacity, its maximum rated output before derates, from 2.7GW today to 1.24GW by July 2027, making 41 permitted turbines the permanent power source ²⁷.

The arithmetic does not close

SemiAnalysis's power model works it this way: the regional utility, the Tennessee Valley Authority (TVA), has received grid service requests of 700MW for Macrohard and 450MW for MiniHard, about 1.2GW that would serve those two of the five Colossus 2 sites in full ². That leaves roughly 1.3GW of compute to be fed by 1.24GW of nameplate generation, which then takes a further haircut on efficiency and derate ². Hence SemiAnalysis's conclusion that "there could be a gap upwards of 300MW" ².

Its proposed fix is a battery field nearing 5.9GWh, lower-power racks and tiered uptime promises ². None of that is permitted or contracted; it is SemiAnalysis's projection ². All of it sits on a campus meant to hold about 1.2 million Blackwell GPUs by the end of 2026↗ ²³.

Everyone else is still waiting for the grid

Hooking 100MW up in Northern Virginia takes about seven years, per the International Energy Agency, which is why operators buy jet engines that run in 24 months ¹. Entergy▲+2.46% — Entergy, up 2.46 percent today, the utility whose Mississippi territory holds the site, told investors on November 2↗ that data-center interest there totals 7 to 12GW with none of it in its base plan ⁴.

Its Mississippi peak load rose 11 percent as data centers ramped ⁴. The biggest tenant makes its own power, off the rate base (outside the utility's regulated costs that set customer bills), under a court order: on October 30 Judge Debra Brown let the NAACP's Clean Air Act suit over the portable turbines proceed ⁸⁴.

The risk is not hypothetical

The NAACP claims the 27 turbines built without permits↗ could emit about 1,700 tons of nitrogen oxides a year and seeks penalties of up to $124,426 a day per violation; a preliminary injunction motion is still pending ⁸. The jet-engine permits themselves are on appeal: the units may emit double the carbon monoxide allowed for the plant's 33 other turbines and 25 percent more volatile organic compounds, and the Mississippi Permit Board hears that appeal on November 9↗ ⁷¹.

More than 100,000 people live within five miles of the sites ⁷. SemiAnalysis's 13GW-in-2027 and $300 billion-plus ARR scenario for SpaceX rests on megawatts this cluster is scheduled to lose ². So does Grok Bot, which hit 800,000 paid weekly users in October↗ while Musk called its serving cost "unsustainably high relative to revenue" ⁵.

For SpaceX holders, the discipline follows from the dates: the November 9 permit appeal and the July 2027 nameplate cut decide whether the compute is actually powered, so the revenue ramp should not be paid for before both settle ²⁷. Until then, what is contracted at Southaven is 1.24GW of legal generation by next summer, and everything above it is projection ²⁷.