In a post on his social media site X on July 22, Elon Musk congratulated staff at his artificial intelligence company, xAI, for quickly getting a state-of-the-art facility up and running for training an AI chatbot they've named Grok.
“Training began at 4:20am local time,” Musk playfully wrote, adding a reference to marijuana, “420,” which has become part of his personal style.
Musk called the data facility, housed in a former Electrolux manufacturing building in southwest Memphis, Tennessee, a “supercluster” and said it would eventually house 100,000 high-performance, liquid-cooled graphics processing unit (GPU) chips made by Nvidia.
“This is the most powerful AI training cluster in the world!” Musk wrote in the post.
Elon Musk claims his new xAI data center in Memphis is the most powerful in the world for training AI. Some Memphians are concerned about the impact the data center's power and water requirements will have on their neighborhoods. Elon Musk claims his new xAI data center in Memphis is the most powerful in the world for training AI. Some Memphians are concerned about the impact the data center's power and water requirements will have on their neighborhoods. See more Photo Illustration: Newsweek/Getty
As AI grows rapidly, technology companies are racing to build larger data centers that can provide the computing power needed to train and operate generative AI systems.
The rapid construction of data centers is also creating energy shortages, with some power companies predicting a huge increase in demand for both energy and new transmission lines to transport power to data centers.
Musk and xAI are requesting 150 megawatts of power from the local utility, Memphis Light, Gas & Water (MLGW), enough to power about 25,000 to 30,000 average homes.
To get that much power, the facility first needs a new substation and power line improvements. Musk didn't want to wait for that, so he found a workaround to power the AI center in the meantime. Industry observers who have been tracking the Memphis facility's progress by satellite have spotted aerial photos showing a row of tractor-trailer-sized generators circling the facility. The generators burn natural gas to produce electricity on-site. (According to an MLGW fact sheet, the facility is connected to a 16-inch gas main.)
Local advocates, such as the city's Chamber of Commerce, have welcomed xAI's arrival and touted the revenue the supercluster could generate.
Great work translation: team, @X team, NVIDIA Support companies receiving training for the Memphis Supercluster began at approximately 4:20 a.m. local time.
With 100,000 liquid-cooled H100s on a single RDMA fabric, it's the world's most powerful AI training cluster.
— Elon Musk (@elonmusk) July 22, 2024
But the speed at which the facility was announced and sited, and the lack of a public process surrounding the decision, have raised concerns from local civic leaders and activists, who worry about the potential impacts on the city's power system, water supply and nearby residents who already bear a disproportionate pollution burden from other heavy industry in the area.
“People want to know what's going to happen,” Memphis City Councilwoman Pearl Walker told Newsweek magazine. “Are we going to run out of water? Are we going to be polluted? Are we going to run out of energy? Are we going to have rolling blackouts?”
While MLGW said in a fact sheet that the xAI facility will not impact other electric customers, Memphis has seen recent power supply concerns, including a temporary power shortage in late 2022 that led to rolling blackouts across much of the region and left hundreds of thousands of people without power.
Walker hosted an informational town hall event Saturday morning to provide voters with more basic information about the xAI project.
“Just because you're Elon Musk doesn't mean you can be a pipe dreamer,” Walker said.
But she and other local clean energy advocates also see Musk's newfound presence in Memphis as an opportunity to help protect the environment by pushing for infrastructure improvements that will bolster the city's energy and water resources.
Box Towns and the Unequal Burden of Pollution
The area of southwest Memphis that Musk chose to build his xAI facility is primarily industrial, bordering the Mississippi River on the west side and home to a steel mill, the city's wastewater treatment plant, an oil refinery and the polluted remains of an old TVA coal-fired power station that was recently converted to a natural gas-fired plant.
A little further east, the industrial area disappears into a residential area oddly named Boxtown.
“It started with freed slaves building their homes in boxcars,” Keshawn Pearson explained in an interview with Newsweek magazine. “Historically, after Reconstruction, you had these tenacious people who found their own way and built their own things for the first time.”
Pearson is president of a citizens group called Memphis Communities Against Pollution (MCAP). (His brother, Justin Pearson, is a state representative and one of the “Tennessee Three” lawmakers who gained national attention last year when they were punished for protesting against gun violence.)
Pearson explained how Boxtown became home to much of the city's industrial pollution. “Unfortunately, we have 16 toxic emission facilities in our immediate vicinity,” he said. “Our life expectancy continues to decline precipitously.”
Data from the U.S. Environmental Protection Agency ranks southwest Memphis in the 98th percentile for the highest rate of toxic emissions into the air in the country. According to the EPA, within a five-mile radius of the industrial center where xAI is currently located, the average life expectancy is just 63 years, nearly 15 years shorter than the national average.
Pearson said it's important to consider context when building new energy-intensive facilities in the area. He also questioned the short-term emissions of the natural gas generators xAI uses before they are fully connected to the utility system. The type of generators used typically have lower emissions than those that burn diesel fuel, but burning natural gas creates local air pollution and greenhouse gas emissions. Pearson said emissions aren't monitored.
“There's no permitting process, no tracking, no records of what's going on,” he said, “and we know which communities are going to have to deal with the impacts.”
XAI and Musk's affiliate Tesla did not respond to multiple requests for comment, and MLGW declined a request for an interview for this story.
Other activists have raised concerns about xAI's water use. Memphis doesn't draw its drinking water from the Mississippi River because it's fortunate enough to sit on an aquifer that feeds groundwater.
Sarah Houston, executive director of Protect Our Aquifer, a group that works to preserve water quality, said in a fact sheet that MLGW expects the xAI facility to use 1 million gallons of water per day, and Houston said she is concerned about how such demand for water will affect the aquifer and nearby residential wells that draw from it.
“The well fields that serve the drinking water supply in the area are known to harbor potential arsenic contaminants,” Houston told Newsweek. “xAI's use of this additional water will continue to result in arsenic runoff and put the drinking water infrastructure at greater risk.”
As with air emissions, Houston has had little public input or input on xAI's water uses, and this lack of public engagement on such a large-scale development has become a point of contention in the community, said Latricia Adams, founder and president of the environmental justice group Young, Gifted and Green.
“It seems very suspicious,” Adams told Newsweek. “Being Elon Musk and a billionaire, it seems like there wasn't any transparency about what permissions were given.”
A Tesla Megapack battery installation for energy storage next to a solar power plant. This type of grid-scale energy storage allows utilities to integrate intermittent renewable energy into their systems to better meet electricity demand. A Tesla Megapack battery installation for energy storage next to a solar power plant. This type of grid-scale energy storage allows utilities to integrate intermittent renewable energy into their systems to better meet electricity demand. Details courtesy of Tesla, Inc.
Driving additional capabilities from xAI
While Memphis civic groups and city council members ponder the challenges of the xAI facility, they are also finding ways to use Musk's presence in the city to reduce the data center's environmental impact and address long-standing challenges to the local infrastructure.
“The jury is still out on whether they're doing the right thing or the wrong thing,” Steven Smith, executive director of the Southern Clean Energy Alliance, told Newsweek.
Smith, who has three decades of experience working on energy issues in Tennessee, said getting the xAI project “right” would require tapping into Musk's other company, Tesla, and its engineering expertise in clean energy storage.
Electric-vehicle maker Tesla also makes large, industrial-scale batteries for energy storage that Tesla Energy calls Megapacks. Smith believes a massive installation of Megapacks in Memphis could help accelerate slow-moving clean-energy and decarbonization efforts for the Tennessee Valley Authority, the region's largest utility, which supplies MLGW.
“Utilities have been hesitant to add renewable energy because of its intermittency,” Smith said. Periods of abundant solar and wind energy don't always coincide with peaks in energy demand, creating problems for utilities. Musk's massive banks of Megapacks could store renewable energy, giving utilities the flexibility and confidence to add more clean energy sources.
“This is a great opportunity for Memphis,” Smith said.
Houston of Protect Our Aquifer sees a similar opportunity to “make good from bad” xAI's water use. Her group has long advocated for adding a recycled water facility to the city's wastewater treatment plant to supply industrial water and relieve pressure on the aquifer.
“The city's wastewater treatment plant is literally right next door to xAI,” Houston says, “which provides us with a great opportunity to reduce our aquifer usage.”
In a fact sheet, MLGW indicated that additional energy storage through Tesla Energy Megapacks and a reclaimed water facility are both under discussion.
City Council Member Pearl Walker said she has been pushing for xAI development to be as beneficial as possible for the city.
“We've had some deals in the past that haven't been great for us,” she said. “We're looking at how this can help us pave the way to sustainability.”
