'How come I can’t breathe?': Backlash in Memphis Over Musk's Data Company
The company's turbines, capable of powering 280,000 homes, operate without emission controls in a region that has the highest rates of asthma hospitalizations in Tennessee.
TroibNews 
MEMPHIS, Tennessee — Elon Musk’s artificial intelligence company is contributing to smog-forming pollution in South Memphis, an area that already leads the state in emergency department visits for asthma.
None of the 35 methane gas turbines used to power xAI’s extensive supercomputer are fitted with the pollution controls commonly mandated by federal regulations.
The company also lacks Clean Air Act permits.
Since its arrival in Memphis just 11 months ago, xAI has quickly become one of Shelby County's largest emitters of nitrogen oxides, compounds that produce smog, according to data analyzed by environmental organizations and reviewed by PMG's E&E News. The facility operates in an area where the air quality is already deemed unhealthy due to smog.
The turbines are releasing nitrogen oxides at an estimated annual rate of 1,200 to 2,000 tons, significantly surpassing the emissions from both the gas-fired power plant across the street and the nearby oil refinery. These estimates come from the Southern Environmental Law Center, a nonpartisan legal group focused on the South, which used manufacturer specifications to assess xAI's emissions and compare them with data reported by other South Memphis plants to the Environmental Protection Agency’s National Emissions Inventory.
During a product launch in February, Musk stated that the turbines were essential for getting the third version of the company’s AI chatbot operational on time, noting: "We have generators on one side of the building, just trailer after trailer of generators until we can get the utility power to come in." He has yet to publicly address concerns regarding the pollution from the turbines or respond to requests about their lack of pollution controls.
Just three miles away lies Boxtown, a neighborhood integrated into Memphis in 1968, the year of the assassination of Rev. Martin Luther King Jr. at the Lorraine Motel downtown. Even after annexation, many homes did not have running water or sewage services into the 1970s.
Currently, over 90 percent of residents in Boxtown’s ZIP code are Black, with a median household income of $36,000, as per Census Bureau data. The area also houses more than 17 industrial facilities—some sharing an industrial park with xAI—that release enough toxic pollution to necessitate registration with the EPA’s Toxics Release Inventory.
“I can’t breathe at home, it smells like gas outside,” Boxtown resident Alexis Humphreys tearfully stated at a public hearing about the turbines on April 25, holding up her asthma inhaler. “How come I can’t breathe at home and y’all get to breathe at home?”
The turbines together generate enough energy to power 280,000 homes. xAI has relied on them as the energy demands of its data processing center have exceeded the capabilities of local electric utilities.
Shannon Lynn, xAI's environmental consultant, claimed during a Memphis Chamber of Commerce webinar that the turbines are only temporary and don’t necessitate federal permits for their emissions of NOx and other hazardous air pollutants like formaldehyde. This assertion appears to hinge on a loophole in federal regulations that critics, including environmental groups and former EPA officials, argue should not apply in this case.
In January, facing increasing pressure from community members and environmental advocates, xAI applied for permits for 15 turbines, which it intends to make permanent.
Lynn indicated the company would not install pollution controls on the turbines until its application is approved, stating that this addition “will make xAI the lowest-emitting facility in the country.” Brent Mayo, xAI's local representative, echoed this sentiment during a permit hearing. Both Lynn and Mayo did not respond to PMG’s E&E News' requests for comment and have not disclosed how much longer the “temporary” turbines will remain on-site. Musk also did not respond to inquiries.
Bruce Buckheit, a former EPA air enforcement director, argued that the company is violating the Clean Air Act, asserting that at a minimum, the turbines that will remain should have had pollution controls from the outset. “There needs to be a permit beforehand,” he insisted. “You don’t just get that first year for free.”
The case regarding xAI in Memphis could serve as a national test case for artificial intelligence, which requires more electricity than typical internet searches to function even for basic tasks. Data centers across the country have faced challenges in meeting the energy demands of “hyper users,” often resorting to finding alternative power sources.
While the Trump administration supported artificial intelligence initiatives, it also eliminated various programs focused on reducing pollution in communities of color. The agency listed making “the United States the artificial intelligence capital of the world” as one of five priorities that would guide the EPA’s work. Recently, the EPA has proposed easing pollution regulations on some internal combustion engines commonly utilized by data centers.
“Data centers are a highly competitive space, and other companies are watching what xAI does,” remarked Amanda Garcia, senior attorney for the Southern Environmental Law Center, advocating for data centers to use more renewable energy to mitigate pollution and draw from the electrical grid. “Right now, what xAI is doing is essentially running a power plant without a permit, and it has a real risk of harming people's health.”
The primary product of xAI is Musk’s chatbot, Grok, which also produces images. It is recognized for having fewer user restrictions than alternatives like ChatGPT that prevent requests for copyright-infringing or insensitive images. Grok permits users to create deepfakes, such as images of Mickey Mouse dressed in a Nazi uniform. Musk has described it as “the most fun AI in the world.”
Residents of Boxtown assert that they are paying for these images with their health.
During a public hearing regarding xAI’s permits at Fairley High School on April 25, several residents recounted instances of asthma and cancer within their families that they attribute to air pollution, urging the Shelby County Department of Health to deny xAI’s permit and dismantle all the turbines. Many residents suffer from health issues, including asthma and chronic obstructive pulmonary disease, predating xAI’s establishment in South Memphis. However, the effects of NOx emissions are known to exacerbate lung conditions, and residents harbor fears that the massive quantity of pollutants emitted by xAI will further jeopardize their health. Some, including Humphreys, displayed their inhalers and portable oxygen tanks as evidence of the damage.
Many view xAI as simply the latest instance of Memphis designating their community as a “sacrifice zone,” noted KeShaun Pearson, leader of the nonprofit Memphis Community Against Pollution. Pearson has lost both grandmothers to cancer in their 60s and blames pollution for their deaths.
“It’s amazing when you grow up and realize how redlining has allowed these industries to kill your family,” he said. “Elon Musk is a representation of the oligarchy we already knew was operating under Jim Crow. It’s a familiar evil.”
The Greater Memphis Chamber of Commerce proudly touts xAI’s presence as a success.
An economic development organization, the chamber actively sought to attract xAI last spring, according to President Ted Townsend. The choice of location for Musk’s supercomputer hinged on access to electricity. Colossus, as Musk refers to it, housed around 100,000 computer chips at the time and demanded 150 megawatts of power.
Townsend and Memphis Light, Gas and Water's head signed nondisclosure agreements with xAI. In private meetings, they helped the company devise a plan, directing it to a former oven factory that had been vacated just years prior, already equipped with a gas hookup and a substation supplying 8 megawatts of power. The utility agreed to support xAI’s request for 150 megawatts, contingent on approval from the Tennessee Valley Authority’s board of directors.
“The AI race is just that, it’s a race,” Townsend stated. “So expediting and building out infrastructure as quickly as possible in the most appropriate ways, within the lines of regulations and laws, that is how we have been instructed and guided.”
Memphis utility officials did not allow their president, Doug McGowen, to speak to the media or answer written questions regarding xAI's power supply, referring all inquiries back to the Chamber of Commerce.
Not included in those negotiations were the Memphis City Council, the county Board of Commissioners, and TVA, whose board would eventually need to authorize requests for more than 100 megawatts of power.
They only became aware of the agreement in early June when Musk announced it on social media, referencing the city’s musical heritage: “Elvis is in the building.”
The public announcement immediately raised alarms about the potential effects of xAI’s power consumption on Memphis residents. In 2022, high demand during winter storms forced TVA to implement rolling blackouts on some of the coldest days.
Officials from Memphis Light, Gas and Water reassured the public that xAI had brought its own gas generators to power the data center pending the TVA board's approval of the power request. The turbines could also be utilized if the authority called on industrial users to reduce their power consumption during peak demand periods.
Normally, stationary gas turbines must secure permits prior to activation due to the levels of NOx and other pollutants they generate. The permitting process is designed to ensure emitters utilize technology to minimize air pollution. In regions like Shelby County, which already faces smog-related challenges, tighter guidelines exist for NOx emissions. Smog, a blend of gases and chemicals, can aggravate respiratory diseases such as asthma and elevate hospital admissions.
Other data centers seeking permits for the same type of gas turbines as xAI's had done so before construction began.
However, in August, the Shelby County Health Department stated it had not issued permits for the turbines, clarifying in a letter that the EPA had concurred that the department “does not currently have authority regarding those mobile gas burning turbines” as they were viewed as temporary.
The letter included a request Director Michelle Taylor had made to the EPA, suggesting that “a statement acknowledging mobile source gas-powered turbines do not require a local Title V permit until they have remained in the same location for more than 364 days would be advantageous to all parties concerned.”
Garcia of the SELC found this explanation puzzling, arguing that the Health Department seemed to be invoking an exemption applicable to smaller gas generators, such as those used in road construction. However, she contended that xAI's turbines are sizable and produce enough electricity to warrant regulation as stationary sources, even if they are technically portable.
The SELC has communicated its stance to the Health Department via multiple letters, yet neither Shelby County nor xAI has provided a legal rationale for the turbines' exemption status.
Residents expressed concerns that Memphis had become yet another example of Musk’s companies prioritizing rapid development over adherence to environmental regulations. Past controversies included Tesla being cited for air quality violations in California, SpaceX facing fines in Texas for allegedly discharging industrial wastewater without a permit, and Musk’s tunneling enterprise, The Boring Co., being penalized by Texas for failing to secure a permit to release industrial stormwater.
Since August, the number of gas turbines at the xAI facility has only increased, with new information surfacing only after community outcry.
Initially, officials from Memphis Light, Gas and Water and the chamber suggested last summer that there were 18 turbines of varying sizes. However, when xAI submitted its permit application in January, it listed only 15 turbines, each rated at 16 megawatts. By the end of March, environmental groups conducted an aerial surveillance of the site and reported finding 35 operational turbines. Memphis Mayor Paul Young defended the company, claiming that only 15 were actively generating power and that the others served as backups.
But in late April, environmental advocates sent a plane equipped with thermal imaging over the installation and discovered 33 turbines emitting considerable heat — indicative of ongoing electricity generation and pollution.
“The way they have come into the city, it’s like, oh, you think we are unintelligent, you think that the people in these communities aren’t able to comprehend what you are doing and will take this assault on our health lying down,” declared 15-year-old Boxtown resident Jasmine Bernard.
Mayor Young did not respond to a request for an interview.
Lynn, the environmental consultant mentioned in xAI’s permit application, also did not reply to requests for comment. During a late-April webinar for the Chamber of Commerce, he addressed community questions about the turbines without disclosing his association with xAI, being introduced only as “an expert … who brings decades of experience on environmental compliance issues.”
In the webinar, Lynn asserted that xAI did not require air permits for the 35 turbines already on-site since “there’s rules that say temporary sources can be in place for up to 364 days a year. They are not subject to permitting requirements.”
Should a permit be granted, only seven of the existing turbines will remain, and they will be retrofitted with selective catalytic reduction pollution controls to limit NOx emissions to 2 parts per million. Conversely, similar turbines are known to emit NOx at levels of 9 parts per million, and certain models can emit as high as 25 parts per million, according to the manufacturers. xAI also plans to introduce eight more turbines equipped with pollution controls.
“That’s why we’re filing a permit because you have to have a permit for a stationary source,” Lynn stated.
The remaining 28 turbines are currently classified as “temporary” and will be “slowly” removed as xAI completes construction on two substations. However, the timeline remains uncertain, as only one substation has received approval from the TVA board. Townsend from the Chamber of Commerce admitted he has no insights into xAI’s schedule.
The SELC argues that xAI’s turbines are too large for the temporary permitting loophole and must be regulated as stationary pollution sources, regardless of their portability. John Walke, a former attorney with the EPA’s Office of General Counsel who now works with the Natural Resources Defense Council, concurs that all turbines should require stationary source permits.
“XAI’s position is quite suspect — I mean, they’re huge,” he remarked. “The temporary or not temporary argument is irrelevant.”
Neither Walke nor Buckheit, the former EPA enforcement official, is involved in this case. Buckheit asserts that at a minimum, the seven turbines destined to remain on-site should have had a permit from the outset. He contends that the Health Department should have requested verification in advance that xAI’s turbines would be relocated within a year before accepting the company's view that they were temporary.
“It’s been many months. Unless they are going to be shutting them down soon, they will have violated the law,” he warned. “How does the county know that they are going to be done within a year? Does the county care?”
It remains unclear what measures Shelby County employed to determine that permits were unnecessary for the turbines or when that decision was reached.
Townsend asserted that the Health Department “was involved from day one.” Taylor, the Health Department director, declined an interview request but has hinted she was kept in the dark.
In an April permit hearing, Taylor noted that her office only learned about the turbines when the SELC requested a copy of the air permit. She urged everyone present to “engage the Shelby Health Department early regarding new projects so that we can look into what the environmental impacts will be.”
“If we do not know if something is coming, we cannot do that research,” she stated. “Shelby County Health Department cannot assist with projects it is not aware of at the inception.”
The EPA's involvement is also ambiguous.
In early August, the Health Department conducted a brief consultation with the EPA regarding the issue, during which the federal agency reportedly concurred that no permit was required for the turbines.
However, last November, EPA Region 4 Air and Radiation Director Denisse Diaz wrote to Taylor indicating that although the agency understood the turbines “are expected to cease operations in the next few months,” it would conduct a comprehensive review to verify this. She also suggested that the county set up air monitoring to track emissions from the turbines, which has yet to occur.
“The EPA will need more specific information about the generator units operating at the xAI site,” Diaz noted in a letter acquired by E&E News.
The letter was dispatched shortly before the presidential election.
EPA spokesperson Molly Vaseliou remarked that the agency is evaluating a “request for assistance” from Shelby County.
Since taking office in January, the Trump administration has worked to support the growing artificial intelligence sector. Vaseliou stated that the agency is “eager to work with AI leaders” to streamline permitting and regulations, facilitating the development of American data centers.
The agency has also been rolling back more than 30 pollution-restrictive regulations introduced in March, with some targeting how long internal combustion engines can operate without a permit. These engines are frequently used to power pumps and compressors in power and manufacturing plants, especially during emergencies. New guidance from the EPA allows certain engines to function for up to 50 hours annually outside of emergencies, a measure the agency touts as a crucial step in enhancing reliable power for data centers and utilities.
EPA Administrator Lee Zeldin publicly committed to supporting AI initiatives while “unleashing American energy dominance” in a Fox News appearance shortly after the regulatory rollback was announced.
“These are all very important to President Trump, so they are important to me,” he declared.
The rising demand for electricity from data centers has posed a challenge for utilities nationwide, given the immense energy requirements of supercomputers and the corresponding strain on electrical grids.
Typically, utilities offer discounted electricity to commercial users because of their high energy demands and the significant economic contributions they can make to a community. However, data centers, while requiring vast amounts of energy, generate relatively few jobs, prompting some utilities to consider hiking rates for these “hyper users.”
This includes the TVA board, which was to contemplate new rates for data centers, including xAI, in its May meeting. However, the board's ability to approve such resolutions came into question after President Trump dismissed two of its members. The consideration of data center rates has been postponed, TVA spokesperson Scott Brooks confirmed.
The White House did not respond to requests for comment.
The rapid proliferation of data centers has also led to a shortage of gas turbines as utilities seek to bolster generation capacity to cater to the supercomputers and as firms like xAI pursue their own electricity production.
Since arriving in Memphis last June, xAI's power demands have escalated. Following months of testing, Colossus became fully operational in September. On that same day, Musk announced on social media that the number of computer chips onsite would double to 200,000 “in a few months.”
He has stated that Colossus will require 2,000 megawatts for its expansion. So far, TVA has only approved xAI’s initial request for 150 megawatts. The 15 turbines seeking permitting will contribute an additional 420 megawatts. In October, xAI requested Memphis Light, Gas and Water to evaluate the possibility of supplying an extra 260 megawatts through a new substation on recently leased land in South Memphis. However, construction cannot begin until TVA sanctions sending electricity to that location, a process that could take months.
“It will be the most powerful training cluster in the world,” Musk proclaimed when announcing the latest version of Grok in February. “We are not stopping here.”
For the residents of Boxtown and South Memphis, xAI’s presence represents a setback following a string of recent environmental successes.
Two years ago, local opposition halted a proposed 50-mile oil pipeline that would have coursed through neighborhoods like Boxtown, ultimately stopped after the City Council passed a law aimed at restricting such development.
Then, in April, a medical sterilization plant known to emit carcinogenic ethylene oxide closed down after residents blamed it for high cancer rates over the years.
The Memphis Chamber of Commerce's backing of xAI and the absence of permits for the turbines felt like a betrayal to many in the community.
“They put our lungs and our air on the auction block and sold us to the richest man in the world,” state Rep. Justin Pearson, a Democrat and KeShaun Pearson’s brother, said during a protest in late April.
At the permit hearing, Taylor noted that city zoning laws and historical racism contributed to the high concentration of polluters in South Memphis. She presented a slide juxtaposing a zoning map with a redlining map from the 1930s, which real estate lenders utilized to restrict investment in predominantly Black neighborhoods.
“Right now, we are still using a 1953 zoning map to make zoning decisions, and it looks very much like the 1930s redlining map,” she remarked. “There are several levels of government responsible for what those maps look like.”
More industrial development may be on the horizon.
Following xAI’s relocation to the city, the Memphis chamber has rebranded the area as a “Digital Delta,” attracting interest from companies such as chip manufacturer Nvidia, along with Dell and Super Micro, according to chamber sources and xAI.
“We have established the efficiency, the partnership, really the culture of ‘yes’ that we are able to get to what you need and really provide for our community,” Townsend asserted.
He added that companies do not require community approval for installing industry in South Memphis, “as long as they are going through the correct process of permitting.”
“It doesn’t always require a community to say, ‘Well, we are OK with that or we are not,’” he explained. “It’s a capitalistic thing. Companies come in and they operate.”
Driving past xAI in April, a loud, high-pitched buzzing filled the air, emanating from the numerous turbines lining the building, which spans the size of 13 football fields. The air above the semitrailer-sized turbines shimmered with heat escaping alongside the emissions produced from burning methane gas.
In nearby Boxtown, the streets lacked sidewalks and had a distinctly rural ambiance. With modest homes surrounded by trees, the neighborhood appeared serene — until industrial and sewage scents wafted in from the industrial park.
Gathering in a neighbor’s garden, several residents contemplated the implications of the world’s richest man establishing a presence in their community alongside turbines.
“If he’s the richest man in the world, buy this whole community up, make us millionaires, pave those streets with gold,” Sarah Gadney joked.
Easter May Knox, a 74-year-old with chronic obstructive pulmonary disease, shook her head in response. Lowering the KN95 mask she wore to protect against pollution, she said, “He may be a millionaire, a billionaire — whatever kind of ‘aire’ he is. But what we need here is clean air.”
Allen M Lee for TROIB News
None of the 35 methane gas turbines used to power xAI’s extensive supercomputer are fitted with the pollution controls commonly mandated by federal regulations.
The company also lacks Clean Air Act permits.
Since its arrival in Memphis just 11 months ago, xAI has quickly become one of Shelby County's largest emitters of nitrogen oxides, compounds that produce smog, according to data analyzed by environmental organizations and reviewed by PMG's E&E News. The facility operates in an area where the air quality is already deemed unhealthy due to smog.
The turbines are releasing nitrogen oxides at an estimated annual rate of 1,200 to 2,000 tons, significantly surpassing the emissions from both the gas-fired power plant across the street and the nearby oil refinery. These estimates come from the Southern Environmental Law Center, a nonpartisan legal group focused on the South, which used manufacturer specifications to assess xAI's emissions and compare them with data reported by other South Memphis plants to the Environmental Protection Agency’s National Emissions Inventory.
During a product launch in February, Musk stated that the turbines were essential for getting the third version of the company’s AI chatbot operational on time, noting: "We have generators on one side of the building, just trailer after trailer of generators until we can get the utility power to come in." He has yet to publicly address concerns regarding the pollution from the turbines or respond to requests about their lack of pollution controls.
Just three miles away lies Boxtown, a neighborhood integrated into Memphis in 1968, the year of the assassination of Rev. Martin Luther King Jr. at the Lorraine Motel downtown. Even after annexation, many homes did not have running water or sewage services into the 1970s.
Currently, over 90 percent of residents in Boxtown’s ZIP code are Black, with a median household income of $36,000, as per Census Bureau data. The area also houses more than 17 industrial facilities—some sharing an industrial park with xAI—that release enough toxic pollution to necessitate registration with the EPA’s Toxics Release Inventory.
“I can’t breathe at home, it smells like gas outside,” Boxtown resident Alexis Humphreys tearfully stated at a public hearing about the turbines on April 25, holding up her asthma inhaler. “How come I can’t breathe at home and y’all get to breathe at home?”
The turbines together generate enough energy to power 280,000 homes. xAI has relied on them as the energy demands of its data processing center have exceeded the capabilities of local electric utilities.
Shannon Lynn, xAI's environmental consultant, claimed during a Memphis Chamber of Commerce webinar that the turbines are only temporary and don’t necessitate federal permits for their emissions of NOx and other hazardous air pollutants like formaldehyde. This assertion appears to hinge on a loophole in federal regulations that critics, including environmental groups and former EPA officials, argue should not apply in this case.
In January, facing increasing pressure from community members and environmental advocates, xAI applied for permits for 15 turbines, which it intends to make permanent.
Lynn indicated the company would not install pollution controls on the turbines until its application is approved, stating that this addition “will make xAI the lowest-emitting facility in the country.” Brent Mayo, xAI's local representative, echoed this sentiment during a permit hearing. Both Lynn and Mayo did not respond to PMG’s E&E News' requests for comment and have not disclosed how much longer the “temporary” turbines will remain on-site. Musk also did not respond to inquiries.
Bruce Buckheit, a former EPA air enforcement director, argued that the company is violating the Clean Air Act, asserting that at a minimum, the turbines that will remain should have had pollution controls from the outset. “There needs to be a permit beforehand,” he insisted. “You don’t just get that first year for free.”
The case regarding xAI in Memphis could serve as a national test case for artificial intelligence, which requires more electricity than typical internet searches to function even for basic tasks. Data centers across the country have faced challenges in meeting the energy demands of “hyper users,” often resorting to finding alternative power sources.
While the Trump administration supported artificial intelligence initiatives, it also eliminated various programs focused on reducing pollution in communities of color. The agency listed making “the United States the artificial intelligence capital of the world” as one of five priorities that would guide the EPA’s work. Recently, the EPA has proposed easing pollution regulations on some internal combustion engines commonly utilized by data centers.
“Data centers are a highly competitive space, and other companies are watching what xAI does,” remarked Amanda Garcia, senior attorney for the Southern Environmental Law Center, advocating for data centers to use more renewable energy to mitigate pollution and draw from the electrical grid. “Right now, what xAI is doing is essentially running a power plant without a permit, and it has a real risk of harming people's health.”
The primary product of xAI is Musk’s chatbot, Grok, which also produces images. It is recognized for having fewer user restrictions than alternatives like ChatGPT that prevent requests for copyright-infringing or insensitive images. Grok permits users to create deepfakes, such as images of Mickey Mouse dressed in a Nazi uniform. Musk has described it as “the most fun AI in the world.”
Residents of Boxtown assert that they are paying for these images with their health.
During a public hearing regarding xAI’s permits at Fairley High School on April 25, several residents recounted instances of asthma and cancer within their families that they attribute to air pollution, urging the Shelby County Department of Health to deny xAI’s permit and dismantle all the turbines. Many residents suffer from health issues, including asthma and chronic obstructive pulmonary disease, predating xAI’s establishment in South Memphis. However, the effects of NOx emissions are known to exacerbate lung conditions, and residents harbor fears that the massive quantity of pollutants emitted by xAI will further jeopardize their health. Some, including Humphreys, displayed their inhalers and portable oxygen tanks as evidence of the damage.
Many view xAI as simply the latest instance of Memphis designating their community as a “sacrifice zone,” noted KeShaun Pearson, leader of the nonprofit Memphis Community Against Pollution. Pearson has lost both grandmothers to cancer in their 60s and blames pollution for their deaths.
“It’s amazing when you grow up and realize how redlining has allowed these industries to kill your family,” he said. “Elon Musk is a representation of the oligarchy we already knew was operating under Jim Crow. It’s a familiar evil.”
The Greater Memphis Chamber of Commerce proudly touts xAI’s presence as a success.
An economic development organization, the chamber actively sought to attract xAI last spring, according to President Ted Townsend. The choice of location for Musk’s supercomputer hinged on access to electricity. Colossus, as Musk refers to it, housed around 100,000 computer chips at the time and demanded 150 megawatts of power.
Townsend and Memphis Light, Gas and Water's head signed nondisclosure agreements with xAI. In private meetings, they helped the company devise a plan, directing it to a former oven factory that had been vacated just years prior, already equipped with a gas hookup and a substation supplying 8 megawatts of power. The utility agreed to support xAI’s request for 150 megawatts, contingent on approval from the Tennessee Valley Authority’s board of directors.
“The AI race is just that, it’s a race,” Townsend stated. “So expediting and building out infrastructure as quickly as possible in the most appropriate ways, within the lines of regulations and laws, that is how we have been instructed and guided.”
Memphis utility officials did not allow their president, Doug McGowen, to speak to the media or answer written questions regarding xAI's power supply, referring all inquiries back to the Chamber of Commerce.
Not included in those negotiations were the Memphis City Council, the county Board of Commissioners, and TVA, whose board would eventually need to authorize requests for more than 100 megawatts of power.
They only became aware of the agreement in early June when Musk announced it on social media, referencing the city’s musical heritage: “Elvis is in the building.”
The public announcement immediately raised alarms about the potential effects of xAI’s power consumption on Memphis residents. In 2022, high demand during winter storms forced TVA to implement rolling blackouts on some of the coldest days.
Officials from Memphis Light, Gas and Water reassured the public that xAI had brought its own gas generators to power the data center pending the TVA board's approval of the power request. The turbines could also be utilized if the authority called on industrial users to reduce their power consumption during peak demand periods.
Normally, stationary gas turbines must secure permits prior to activation due to the levels of NOx and other pollutants they generate. The permitting process is designed to ensure emitters utilize technology to minimize air pollution. In regions like Shelby County, which already faces smog-related challenges, tighter guidelines exist for NOx emissions. Smog, a blend of gases and chemicals, can aggravate respiratory diseases such as asthma and elevate hospital admissions.
Other data centers seeking permits for the same type of gas turbines as xAI's had done so before construction began.
However, in August, the Shelby County Health Department stated it had not issued permits for the turbines, clarifying in a letter that the EPA had concurred that the department “does not currently have authority regarding those mobile gas burning turbines” as they were viewed as temporary.
The letter included a request Director Michelle Taylor had made to the EPA, suggesting that “a statement acknowledging mobile source gas-powered turbines do not require a local Title V permit until they have remained in the same location for more than 364 days would be advantageous to all parties concerned.”
Garcia of the SELC found this explanation puzzling, arguing that the Health Department seemed to be invoking an exemption applicable to smaller gas generators, such as those used in road construction. However, she contended that xAI's turbines are sizable and produce enough electricity to warrant regulation as stationary sources, even if they are technically portable.
The SELC has communicated its stance to the Health Department via multiple letters, yet neither Shelby County nor xAI has provided a legal rationale for the turbines' exemption status.
Residents expressed concerns that Memphis had become yet another example of Musk’s companies prioritizing rapid development over adherence to environmental regulations. Past controversies included Tesla being cited for air quality violations in California, SpaceX facing fines in Texas for allegedly discharging industrial wastewater without a permit, and Musk’s tunneling enterprise, The Boring Co., being penalized by Texas for failing to secure a permit to release industrial stormwater.
Since August, the number of gas turbines at the xAI facility has only increased, with new information surfacing only after community outcry.
Initially, officials from Memphis Light, Gas and Water and the chamber suggested last summer that there were 18 turbines of varying sizes. However, when xAI submitted its permit application in January, it listed only 15 turbines, each rated at 16 megawatts. By the end of March, environmental groups conducted an aerial surveillance of the site and reported finding 35 operational turbines. Memphis Mayor Paul Young defended the company, claiming that only 15 were actively generating power and that the others served as backups.
But in late April, environmental advocates sent a plane equipped with thermal imaging over the installation and discovered 33 turbines emitting considerable heat — indicative of ongoing electricity generation and pollution.
“The way they have come into the city, it’s like, oh, you think we are unintelligent, you think that the people in these communities aren’t able to comprehend what you are doing and will take this assault on our health lying down,” declared 15-year-old Boxtown resident Jasmine Bernard.
Mayor Young did not respond to a request for an interview.
Lynn, the environmental consultant mentioned in xAI’s permit application, also did not reply to requests for comment. During a late-April webinar for the Chamber of Commerce, he addressed community questions about the turbines without disclosing his association with xAI, being introduced only as “an expert … who brings decades of experience on environmental compliance issues.”
In the webinar, Lynn asserted that xAI did not require air permits for the 35 turbines already on-site since “there’s rules that say temporary sources can be in place for up to 364 days a year. They are not subject to permitting requirements.”
Should a permit be granted, only seven of the existing turbines will remain, and they will be retrofitted with selective catalytic reduction pollution controls to limit NOx emissions to 2 parts per million. Conversely, similar turbines are known to emit NOx at levels of 9 parts per million, and certain models can emit as high as 25 parts per million, according to the manufacturers. xAI also plans to introduce eight more turbines equipped with pollution controls.
“That’s why we’re filing a permit because you have to have a permit for a stationary source,” Lynn stated.
The remaining 28 turbines are currently classified as “temporary” and will be “slowly” removed as xAI completes construction on two substations. However, the timeline remains uncertain, as only one substation has received approval from the TVA board. Townsend from the Chamber of Commerce admitted he has no insights into xAI’s schedule.
The SELC argues that xAI’s turbines are too large for the temporary permitting loophole and must be regulated as stationary pollution sources, regardless of their portability. John Walke, a former attorney with the EPA’s Office of General Counsel who now works with the Natural Resources Defense Council, concurs that all turbines should require stationary source permits.
“XAI’s position is quite suspect — I mean, they’re huge,” he remarked. “The temporary or not temporary argument is irrelevant.”
Neither Walke nor Buckheit, the former EPA enforcement official, is involved in this case. Buckheit asserts that at a minimum, the seven turbines destined to remain on-site should have had a permit from the outset. He contends that the Health Department should have requested verification in advance that xAI’s turbines would be relocated within a year before accepting the company's view that they were temporary.
“It’s been many months. Unless they are going to be shutting them down soon, they will have violated the law,” he warned. “How does the county know that they are going to be done within a year? Does the county care?”
It remains unclear what measures Shelby County employed to determine that permits were unnecessary for the turbines or when that decision was reached.
Townsend asserted that the Health Department “was involved from day one.” Taylor, the Health Department director, declined an interview request but has hinted she was kept in the dark.
In an April permit hearing, Taylor noted that her office only learned about the turbines when the SELC requested a copy of the air permit. She urged everyone present to “engage the Shelby Health Department early regarding new projects so that we can look into what the environmental impacts will be.”
“If we do not know if something is coming, we cannot do that research,” she stated. “Shelby County Health Department cannot assist with projects it is not aware of at the inception.”
The EPA's involvement is also ambiguous.
In early August, the Health Department conducted a brief consultation with the EPA regarding the issue, during which the federal agency reportedly concurred that no permit was required for the turbines.
However, last November, EPA Region 4 Air and Radiation Director Denisse Diaz wrote to Taylor indicating that although the agency understood the turbines “are expected to cease operations in the next few months,” it would conduct a comprehensive review to verify this. She also suggested that the county set up air monitoring to track emissions from the turbines, which has yet to occur.
“The EPA will need more specific information about the generator units operating at the xAI site,” Diaz noted in a letter acquired by E&E News.
The letter was dispatched shortly before the presidential election.
EPA spokesperson Molly Vaseliou remarked that the agency is evaluating a “request for assistance” from Shelby County.
Since taking office in January, the Trump administration has worked to support the growing artificial intelligence sector. Vaseliou stated that the agency is “eager to work with AI leaders” to streamline permitting and regulations, facilitating the development of American data centers.
The agency has also been rolling back more than 30 pollution-restrictive regulations introduced in March, with some targeting how long internal combustion engines can operate without a permit. These engines are frequently used to power pumps and compressors in power and manufacturing plants, especially during emergencies. New guidance from the EPA allows certain engines to function for up to 50 hours annually outside of emergencies, a measure the agency touts as a crucial step in enhancing reliable power for data centers and utilities.
EPA Administrator Lee Zeldin publicly committed to supporting AI initiatives while “unleashing American energy dominance” in a Fox News appearance shortly after the regulatory rollback was announced.
“These are all very important to President Trump, so they are important to me,” he declared.
The rising demand for electricity from data centers has posed a challenge for utilities nationwide, given the immense energy requirements of supercomputers and the corresponding strain on electrical grids.
Typically, utilities offer discounted electricity to commercial users because of their high energy demands and the significant economic contributions they can make to a community. However, data centers, while requiring vast amounts of energy, generate relatively few jobs, prompting some utilities to consider hiking rates for these “hyper users.”
This includes the TVA board, which was to contemplate new rates for data centers, including xAI, in its May meeting. However, the board's ability to approve such resolutions came into question after President Trump dismissed two of its members. The consideration of data center rates has been postponed, TVA spokesperson Scott Brooks confirmed.
The White House did not respond to requests for comment.
The rapid proliferation of data centers has also led to a shortage of gas turbines as utilities seek to bolster generation capacity to cater to the supercomputers and as firms like xAI pursue their own electricity production.
Since arriving in Memphis last June, xAI's power demands have escalated. Following months of testing, Colossus became fully operational in September. On that same day, Musk announced on social media that the number of computer chips onsite would double to 200,000 “in a few months.”
He has stated that Colossus will require 2,000 megawatts for its expansion. So far, TVA has only approved xAI’s initial request for 150 megawatts. The 15 turbines seeking permitting will contribute an additional 420 megawatts. In October, xAI requested Memphis Light, Gas and Water to evaluate the possibility of supplying an extra 260 megawatts through a new substation on recently leased land in South Memphis. However, construction cannot begin until TVA sanctions sending electricity to that location, a process that could take months.
“It will be the most powerful training cluster in the world,” Musk proclaimed when announcing the latest version of Grok in February. “We are not stopping here.”
For the residents of Boxtown and South Memphis, xAI’s presence represents a setback following a string of recent environmental successes.
Two years ago, local opposition halted a proposed 50-mile oil pipeline that would have coursed through neighborhoods like Boxtown, ultimately stopped after the City Council passed a law aimed at restricting such development.
Then, in April, a medical sterilization plant known to emit carcinogenic ethylene oxide closed down after residents blamed it for high cancer rates over the years.
The Memphis Chamber of Commerce's backing of xAI and the absence of permits for the turbines felt like a betrayal to many in the community.
“They put our lungs and our air on the auction block and sold us to the richest man in the world,” state Rep. Justin Pearson, a Democrat and KeShaun Pearson’s brother, said during a protest in late April.
At the permit hearing, Taylor noted that city zoning laws and historical racism contributed to the high concentration of polluters in South Memphis. She presented a slide juxtaposing a zoning map with a redlining map from the 1930s, which real estate lenders utilized to restrict investment in predominantly Black neighborhoods.
“Right now, we are still using a 1953 zoning map to make zoning decisions, and it looks very much like the 1930s redlining map,” she remarked. “There are several levels of government responsible for what those maps look like.”
More industrial development may be on the horizon.
Following xAI’s relocation to the city, the Memphis chamber has rebranded the area as a “Digital Delta,” attracting interest from companies such as chip manufacturer Nvidia, along with Dell and Super Micro, according to chamber sources and xAI.
“We have established the efficiency, the partnership, really the culture of ‘yes’ that we are able to get to what you need and really provide for our community,” Townsend asserted.
He added that companies do not require community approval for installing industry in South Memphis, “as long as they are going through the correct process of permitting.”
“It doesn’t always require a community to say, ‘Well, we are OK with that or we are not,’” he explained. “It’s a capitalistic thing. Companies come in and they operate.”
Driving past xAI in April, a loud, high-pitched buzzing filled the air, emanating from the numerous turbines lining the building, which spans the size of 13 football fields. The air above the semitrailer-sized turbines shimmered with heat escaping alongside the emissions produced from burning methane gas.
In nearby Boxtown, the streets lacked sidewalks and had a distinctly rural ambiance. With modest homes surrounded by trees, the neighborhood appeared serene — until industrial and sewage scents wafted in from the industrial park.
Gathering in a neighbor’s garden, several residents contemplated the implications of the world’s richest man establishing a presence in their community alongside turbines.
“If he’s the richest man in the world, buy this whole community up, make us millionaires, pave those streets with gold,” Sarah Gadney joked.
Easter May Knox, a 74-year-old with chronic obstructive pulmonary disease, shook her head in response. Lowering the KN95 mask she wore to protect against pollution, she said, “He may be a millionaire, a billionaire — whatever kind of ‘aire’ he is. But what we need here is clean air.”
Allen M Lee for TROIB News
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