Musk's Memphis facility, dubbed Project Colossus, was constructed in just 122 days - a timeline Nvidia CEO Jensen Huang called "superhuman." The facility's massive processing power, combined with Musk's new position within the administration, positions it to potentially become central to federal AI implementation.
The White House has directed agency leaders to develop plans for "large-scale reductions" by March 13, with some departments facing dramatic downsizing. The Environmental Protection Agency, for instance, plans to cut up to 65% of its employees, while workers at the Labor Department and Social Security Administration are bracing for similar measures.
Recent government AI contracts have already driven significant stock movements. Palantir Technologies surged 380% after securing Pentagon AI contracts. Other companies implementing government AI solutions have seen similar dramatic gains. As the administration pushes for rapid AI adoption across agencies, analysts suggest more opportunities may emerge for companies positioned to secure federal contracts.
The initiative has faced scrutiny from both sides of the aisle, with Sen. Susan Collins, R-Maine, calling the layoffs a "big problem." Meanwhile, some 85% of Democrats and Democratic-leaning Americans have expressed an unfavorable view of Musk's role, according to recent Pew Research Center data. Despite the controversy, Musk's net worth has increased by $90 billion since the election, largely due to his stakes in Tesla, SpaceX, and xAI.