xAI's Memphis data centers draw scrutiny over gas turbines and pollution

Elon Musk’s xAI built its Colossus data center in Memphis in 122 days and turned to natural gas turbines after local utilities could not immediately supply enough power, CNBC technology and climate reporter Lora Kolodny said. The project, tied to AI training and inference demand, shows how large AI data centers are pushing tech companies toward on-site fossil-fuel generation even as many continue to discuss cleaner power plans.

Kolodny, who recently reported a CNBC documentary on the Memphis buildout, said xAI moved into a former Electrolux appliance factory in early 2024. She said Tesla had ordered about $500 million of Nvidia chips, but Musk said xAI needed the chips sooner and the order was redirected.

According to Kolodny, xAI used little-known subsidiary names in land deals, while the Memphis Chamber of Commerce supported the project. She said many residents were not fully informed before the data center appeared in their community.

The power gap became the central operating issue. Kolodny said xAI deployed large methane or natural gas-burning turbines as interim power while seeking grid interconnection and buying about $1 billion of Tesla Megapack battery systems and solar panels. The company’s total cost for the data center was not disclosed.

Kolodny said the turbines emit pollutants including fine particulate matter and nitrogen oxides, both relevant to respiratory health and ozone formation. She also said construction activity generated PM2.5. xAI had promised Memphis officials it would help Memphis Light, Gas and Water build a gray-water recycling facility to reduce water stress, but Kolodny said that project has not been completed and remains stalled.

Residents challenge noise and permitting

The local backlash now spans noise, air quality and process. Kolodny said residents near xAI-linked sites described turbine noise comparable to jet engines. One resident involved in a class-action noise nuisance case, Jason Haley, said the sound had disrupted his sleep, according to Kolodny. The discussion also cited Haley’s recordings showing noise levels in the mid-70 decibel range.

The NAACP is also involved in litigation over the buildout. Kolodny said an attorney working with the group argues the projects sit in historically majority-Black and lower-income neighborhoods around Memphis and should be examined as an environmental justice issue. The lawsuit alleges xAI and related entities failed to go through the Clean Air Act permitting process.

Kolodny said public records showed the project used as many as 59 turbines, more than the company had initially indicated, though the number running at any moment varies with workload. Thermal-camera observations cited in the discussion showed more than 30 turbines operating at once at the Memphis-area site.

xAI’s footprint is also expanding beyond the original Memphis facility. Kolodny said two additional data centers are planned around a large power plant site in Greater Memphis, including in Southaven, Mississippi, where SpaceX is building a permanent natural gas-powered facility on a decommissioned power plant site.

AI buildouts test climate commitments

The Memphis fight fits a broader pattern in AI infrastructure. Matt Rosoff, editor-in-chief of The Register, said large data centers once commonly meant 50 to 100 megawatts of demand, while current AI projects are being discussed at gigawatt scale. He cited Colossus at around a gigawatt, a Texas project at roughly 2 gigawatts and a Meta project in Louisiana at 2 to 4 gigawatts.

Kolodny said the Department of Justice and Department of Defense have moved to intervene in the NAACP case and argued it threatens national security. She said the government’s position refers to military use of xAI’s Grok and xAI systems, and asks the court to toss the lawsuit.

There are cleaner models under discussion, but they remain uneven. Kolodny cited a Google arrangement in Minnesota with Xcel Energy and others that is intended to fund nearly 2,000 megawatts of new renewable energy and an iron-air battery. For now, the Memphis case gives data center opponents and local governments a concrete playbook: demand enforceable terms on power, water, noise and permitting before the servers arrive.

This story draws on original reporting from The Register.