Elon Musk's artificial intelligence startup, xAI is under scrutiny in Memphis, Tennessee.The company is accused of operating dozens of unpermitted gas turbines at a major data center. The situation has raised concerns over public health and potential violations of federal and local environmental laws.
The allegations were outlined in an April 9 letter from the Southern Environmental Law Center to the Shelby County Health Department. Memphis is in Shelby County.
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SELC claims xAI is using a former Electrolux manufacturing site for its AI operations. It says the company installed and is operating 35 natural gas turbines—more than double the 15 turbines listed in its initial permit application.
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Residents Alarmed by Scale of Unpermitted Emissions
The SELC said emissions data provided by the turbines' manufacturer show the facility is releasing between 1,200 and 2,100 tons of nitrogen oxides, annually.
These pollutants are known contributors to respiratory illnesses and smog. If confirmed, the site would be the largest industrial emitter of nitrogen oxides in Memphis, the SELC said. "We're profoundly overburdened with industrial pollution," the SELC added, highlighting concerns about the cumulative strain on the health of local residents.
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The turbines, which power xAI's high-capacity computing operation involving 100,000 Nvidia NVDA H100 chips, have a combined output of approximately 422 megawatts—comparable to a full-scale Tennessee Valley Authority's Brownsville gas power plant.
The group said xAI has not disclosed when it intends to decommission the turbines and transition to permanent power from Memphis Light, Gas and Water.
The Memphis data center, referred to internally as "Colossus," began ramping up in 2024 after Musk founded xAI the previous year.
According to SELC, xAI may have violated the Clean Air Act and Shelby County's pre-construction permitting regulations, which require approval before building large-scale pollution sources.
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Amanda Garcia, an attorney for SELC, said in an email to CNBC that the county has full authority to enforce these regulations and hold the company accountable.
The Shelby County Board of Commissioners held a public hearing on April 9 where residents raised concerns about the health impact of air pollution from the turbines. Community members, including KeShaun Pearson, director of Memphis Community Against Pollution, claimed longstanding issues with respiratory illnesses in Southwest Memphis.
Easter May Knox, who said she lives near the facility, described chronic breathing issues in her family. "When I open up that window, I smell everything but the right thing—and the right thing is the clean air," she said at the hearing.
Local officials and environmental groups also criticized the absence of Brent Mayo, a senior manager at xAI responsible for infrastructure development, after residents said they had invited him to attend the hearing.
SELC is urging the county's health department to issue an emergency stop order and impose daily penalties of $25,000 per violation until xAI complies with the Clean Air Act and air permitting regulations.
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