Lawmakers in Memphis say they have been left in the dark about plans for a 150MW data center set to be built in the city by Elon Musk’s AI company xAI.
The startup intends to build the facility on an industrial park near the Mississippi River in southwest Memphis, with founder Musk saying the site will eventually be home to the world's most powerful supercomputer.
City councilors were given a presentation on how the site will be powered at a meeting on Tuesday, with Doug McGowen, CEO of utility company Memphis Light, Gas & Water (MLGW), describing the development as a “win for the city” that will occupy a vacant industrial park and support the building of infrastructure for the benefit of the wider community.
But Power Grid International reports that council members were left feeling “disheartened” by the plan, because they had only learned details about the project from coverage in the media.
Council member Rhonda Logan said: “We don’t know anything. This is already here and we don’t know anything.”
McGowen told the meeting that MLGW had been in discussions with xAI about the project since March. The company has agreed to pay $1 million to upgrade the utility’s distribution system, and it is hoped this will support additional water treatment facilities for use by residents.
Currently the site only has 8MW of power supplied by a nearby substation. MLGW is to upgrade capacity to 50MW in a project that will cost taxpayers $760,000, while xAI is pledging to spend $24 million on a new substation providing an additional 150MW. McGowen said the company believes it can complete this project more quickly and cheaply than MLGW. xAI would receive monthly rebates from the utility until its costs are recouped and MLGW would then take ownership of the substation.
McGowen added that MLGW has carried out a feasibility study into the project, and does not believe it will put additional strain on the Memphis grid. Council members requested an executive session with MLGW to review this study.
The project will need to be approved by the Memphis Shelby County Economic Development Growth Engine (EDGE), grid operator the Tennessee Valley Authority, and government authorities before work can get underway.
xAI announced plans for the data center last month. It would be the “largest multi-billion dollar investment in the city of Memphis’s history," Ted Townsend, president of the Greater Memphis Chamber, said at the time.
The facility will be a 'Gigafactory of Compute,' according to Musk, who said that he aims to have it up and running by fall 2025. "My vision is to build the world’s largest and most powerful supercomputer, and I’m willing to put it in Memphis," Musk said.
It is not known how large the initial phase of the project would be, or how much it will cost.
Musk has claimed that xAI will deploy a 100,000 H100 liquid-cooled training cluster within the next few months, and another 300,000 GPU B200 cluster from next summer.
xAI is believed to currently rent around 16,000 Nvidia H100 GPUs from Oracle Cloud. It also uses Amazon Web Services and spare capacity at X/Twitter data centers.
Earlier this week it was reported that xAI had ended talks to buy more GPU capacity from Oracle, something Musk later confirmed in a post on Twitter/X.
