Memphis residents are raising serious concerns over Elon Musk’s latest venture—a massive data center dubbed the “gigafactory of compute”—set to be built in their city. The project, spearheaded by Musk’s xAI, promises to house the world’s most powerful supercomputer, but locals fear the initiative will overburden the city’s power grid and unfairly saddle taxpayers with the bill.
A letter sent to the Tennessee Valley Authority (TVA) from The Southern Environmental Law Center (SELC) raised a series of concerns about MLGW’s arrangement with xAI. The SELC, representing local community groups, lamented that the new facility would need a ginormous 150MW of power by the end of 2024; enough to provide electricity for all homeowners. This would seem to make xAI MLGW’s single largest electrical user, probably drawing a maximum of 5% of the utility’s total load any given day.
“The xAI facility’s demand for 150MW of firm power by 2024 is jaw-dropping,” the SELC letter stated. “Overcommitting to industrial load could have serious consequences for residential customers, contrary to the TVA Act’s purpose.” The letter also pointed out that Memphis already struggles with power supply issues, noting that the TVA proposed building additional natural gas-powered turbines last year to meet demand.
The data center plans were first revealed by Elon Musk in June, who referred to it as the “gigafactory of compute” and projected that it would be the world’s most powerful supercomputer by September 2025. The facility, inside a 750,000 sq ft ex-Electrolux plant in South Memphis is designed to support up to 100,000 Nvidia H100 GPUs initially before ramping it up into another 300,000 more next year.
Despite its potential benefits, the project has faced criticism for the way it has been handled. The SELC revealed that neither the Memphis City Council nor the MLGW board was informed about the project before its public announcement, raising transparency concerns. “It seems that ordinary MLGW ratepayers will subsidize millions in infrastructure investments for xAI,” the SELC noted, urging a proper review by the MLGW board and city council to evaluate the project’s impact on local residents.
Currently, the data center has only 8 MW of power available but has temporarily addressed this with 14 mobile generators providing an additional 35MW. MLGW plans to upgrade the site’s capacity to 50MW, costing taxpayers $760,000, while xAI has pledged $24 million for a new substation to supply the full 150MW.
As the debate continues, Memphis residents are calling for greater transparency and accountability, insisting that any investment in the city’s future should truly benefit its people.
