March 7 (Reuters) - Elon Musk-owned artificial intelligence firm xAI has bought a 1-million-square-foot property in Southwest Memphis, Tennessee, the Greater Memphis Chamber said on Friday, as the startup looks to expand its AI infrastructure amid intensifying competition in the industry.

The new investment builds on the company's earlier announcement in December, in which it laid out plans to expand its Colossus supercomputer to house at least one million graphics processing units (GPUs) in the state.

Colossus is seen as pivotal in advancing Musk's AI ambitions, as he works to gain a competitive edge over rivals such as OpenAI following the recent escalation in tensions between him and ChatGPT maker's CEO, Sam Altman, with the billionaire's bid to take control of the firm.

The Chamber said that the Colossus supercomputer is "well on the path to the supercluster size", as indicated in xAI's December announcement.

The expansion of AI infrastructure has drawn criticism from environmental activists, as data centers consume large amounts of energy.

The Memphis Chamber said xAI's new facility follows an $80 million water recycling plant and also features the world's largest deployment of Tesla Megapacks for data center operations.

It was reported on Wednesday that Musk's Tesla TSLA.O will also build a 1-million-square-foot factory in Texas to manage and store its Megapack energy products.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Mohammed Safi Shamsi)

((Zaheer.Kachwala@thomsonreuters.com;))