# Tesla builds largest grid battery in US at xAI’s Memphis site > Source: > Published: 2026-09-12 04:16:20+00:00 Tesla official logo (public domain, Wikimedia Commons) — CryptoBriefing brand treatment # Tesla builds largest grid battery in US at xAI’s Memphis site The 720-Megapack installation at xAI's Colossus 2 data center packs roughly 2.8 GWh of storage capacity, enough to backstop one of the most power-hungry AI facilities on the planet. Seven hundred and twenty [Tesla](https://cryptobriefing.com/markets/tesla/) Megapacks, arranged across what used to be relatively quiet Memphis terrain, now form the single largest grid-connected battery system in the United States. Satellite imagery from July 11, 2026, confirmed the sheer footprint of the deployment at xAI’s Colossus 2 data center in Tennessee, a facility purpose-built to train cutting-edge AI models on hundreds of thousands of GPUs. The estimated storage capacity sits around 2.8 GWh, with some projections suggesting it could climb as high as 3.3 GWh. Depending on the specific Megapack model deployed, the system’s power output ranges from 720 MW to 1.4 GW. ## A billion-dollar battery habit Between 2024 and mid-2026, xAI and its parent company SpaceX funneled roughly $1 billion into Tesla Megapacks and related infrastructure. A single purchase in April 2026 alone was worth $269 million. SpaceX acquired xAI back in February 2026, consolidating Elon Musk’s AI ambitions under the same roof as his rocket company. Before the battery system reached its current scale, the Memphis facility leaned on temporary natural gas turbines to fill gaps in grid supply. Those turbines drew environmental criticism from local residents and advocacy groups. The Megapack deployment reduces dependence on those stopgap generators by absorbing grid power during off-peak hours and discharging it during demand spikes. The Tennessee Valley Authority board approved a direct grid connection for the Colossus 2 site in August 2026. Officials at Memphis Light, Gas and Water have publicly acknowledged the scale of the battery system, framing it as a meaningful piece of the region’s evolving energy puzzle. ## Tesla’s energy storage business gains its biggest showcase Tesla began production of its next-generation Megapack 3 at the Texas Megafactory in August 2026. Each Megapack unit is a self-contained lithium-ion battery system designed for utility-scale deployment. Stacking 720 of them in a single location demonstrates both the modularity of the design and the manufacturing throughput required to fulfill orders of this size. The nearly $1 billion in purchases from a single customer over roughly two years represents a meaningful revenue stream. SpaceX acquired xAI, xAI buys Tesla batteries, and the capital flows in a loop that benefits the broader Musk ecosystem. **Disclosure:** This article was edited by Editorial Team. For more information on how we create and review content, see our [Editorial Policy](https://cryptobriefing.com/editorial-policy/).