Tesla has deployed 720 Megapacks at the xAI Colossus 2 data center in Memphis, creating the largest grid-side battery array currently visible in the U.S. According to Canary Media, based on satellite imagery from July 11, the energy capacity is about 2.8 GWh, with some internal estimates mentioning 3.3 GWh, and the power rating varies by model from approximately 720 MW to 1.4 GW.

The procurement amount has been documented in public filings. Tesla's annual report states that it will sell approximately $430 million worth of energy storage products to xAI in 2025, accounting for about 3.4% of that year's energy business revenue; the total energy business revenue for the year is about $12.8 billion. After SpaceX acquired xAI in February 2026, it continued to place orders: in the first half of the year, it purchased approximately $405 million worth of Megapacks; IPO-related disclosures indicate that from January to April, purchases of Tesla products and services amounted to about $303 million, with Megapacks accounting for approximately $269 million. Between 2024 and 2026, the total investment in Tesla products from both sides is expected to reach about $1 billion, with Megapack-related investments around $700 million.

The site previously relied on temporary natural gas turbines to fill the grid connection gap. The first phase of Colossus is set to go online in July 2024, with grid access expanding from about 8 MW to 150 MW; at one point, dozens of turbines were present on-site, and nitrogen oxide emissions led to lawsuits from neighbors and civil rights organizations, with some units being relocated to Southaven, Mississippi, and operated under portable equipment regulations. The batteries are used for charging during off-peak hours and discharging during peak hours, reducing reliance on emergency power generation. The Tennessee Valley Authority board approved direct grid interconnection for Colossus 2 in August; Doug McGowan, head of the Memphis Light, Gas and Water, stated that it is also a world-class grid-connected battery, mentioning about 2 GW of backup capacity for forced load shedding, which does not completely align with satellite counts.

The development side claims the capacity is "enough to supply all of Memphis for two hours." Riley Trettel stated on August 20 that it has a capacity of 3.3 GWh, the largest in the nation. The facility is located near TVA's approximately 780 MW Southaven combined cycle gas plant, and the land was previously acquired for about $80 million, with plans to accommodate hundreds of thousands of GPUs. Power research institutions predict that data center electricity consumption could account for about 17% of U.S. electricity by 2030, and the queue for grid interconnection forces operators to build their own storage to speed up the process. Tesla's Texas factory began producing larger capacity Megapack 3s in early August, and the satellite count occurred before this production line, with further installations still possible.

The market mechanism is internal circular procurement. The buying side is xAI/SpaceX, which must stabilize training loads before and after grid approval; the selling side is Tesla's energy storage production line. Funds flow from the merged SpaceX balance sheet into Tesla's energy revenue, then into the containers on the Memphis site. Beneficiaries include Tesla, which needs to incorporate related sales into energy growth, and data centers that need to use batteries to mitigate licensing and community pressure; the pressured parties are residents involved in local air quality lawsuits and other grid users who must yield capacity to supercomputers during peak times. The event was driven by the simultaneous public disclosure of satellite counts and executive verbal confirmations, rather than a new product launch.

The batteries cannot independently resolve turbine disputes. The city council is still discussing the data center's moratorium and emissions framework, with organizations like the NAACP having sued over interstate portable units. The 720 containers first put "America's largest" on the map, then turned the next round of grid negotiations into a fait accompli.

Source: Public Information