Elon Musk is moving forward with his “Gigafactory of Compute” project in Memphis at a rapid pace, following a decision made in March to build a new supercomputer for his AI startup, xAI. The project, known as “Project Colossus,” is estimated to involve a multi-billion dollar investment and is expected to train xAI’s chatbot Grok. However, some members of the Memphis City Council have raised concerns about the secretive nature of the deal and the data center’s requirements for electricity and water use. They have called for a slowdown to better understand the impacts of the project.
Construction of the supercomputer, which will be used to train xAI’s chatbot Grok, began immediately after the deal was finalized in March. The project has caused concern among constituents, who fear the potential impact on water and energy supply in Memphis. xAI has made verbal pledges to improve the city’s public infrastructure, including building a new power substation and a greywater processing facility, but no contracts have been confirmed for these commitments. Musk has a history of promising public infrastructure to cities that host his companies, but these promises have not always been fulfilled.
The location of the Memphis data center was recently announced, revealing that xAI will be leasing a former manufacturing site in a Black neighborhood in Southwest Memphis. The secrecy surrounding the project and the lack of representation from the community has raised further concerns among residents. However, city officials remain cautiously optimistic about the project, with plans to provide more details to council members in the coming weeks.
The data center’s energy needs, including water and electricity consumption, have also raised questions among local groups and environmental organizations. xAI is expected to draw 1.3 million gallons of water per day from the Memphis Aquifer, but plans for a new greywater plant to address this have not been finalized. Concerns about the impact of the supercomputer’s energy consumption on the city’s power grid and communities overwhelmed with pollution have been raised, prompting discussions about demand response programs and potential regulatory approvals for xAI’s electricity usage.
Despite the challenges and concerns surrounding the project, Elon Musk and xAI are pushing forward with plans to complete the supercomputer by August. The company has verbally committed to building required infrastructure such as a power substation and greywater treatment plant itself. While tax incentives have been common for Musk’s companies in the past, xAI is not currently seeking or receiving tax breaks in Memphis. However, the possibility of utilizing such incentives in the future remains open. The city and utility officials are working to address community concerns and ensure transparency in the development of the data center.
