Memphis Residents Oppose Musk's AI Supercomputer Over Power Concerns

A group of Memphis residents has written to local authorities expressing concern about Elon Musk’s plans to build the world’s largest supercomputer for his xAI startup in the city.

Announced in June, xAI’s “gigafactory of compute” will provide the startup with its own dedicated supercomputer to run its AI training to reduce its reliance on X and Tesla servers.

However, a non-profit group of local residents, called the Southern Environmental Law Center (SELC), is concerned with the planned supercomputer facility, calling the proposed site “harmful.” 

In a letter to Tennessee Valley Authority (TVA), the state’s grid operator, the group is worried the company lacks the grid infrastructure and power to xAI’s services while maintaining electricity services for the community.

The group argues that the xAI facility is already demanding 150 megawatts of power by the end of 2024, which could instead power 100,000 homes.

“We strongly urge the Board to consider the risk of serious harm to our community posed by xAI and to deny permission to TVA and Memphis Light, Gas & Water (MLGW) to provide power to the xAI facility,” the letter reads.

Residents are concerned that the local grid operator lacks the generating and transmission capacity to serve xAI.

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The letter cites an October 2023 notice filed by TVA that it identified a reliability concern in the Memphis-area grid — some nine months before xAI announced intentions to set up shop in the city.

They cited the example of Winter Storm Elliott which left thousands without power as TVA’s Memphis gas plants failed to fire.

“It cannot reasonably be disputed that xAI will require TVA to generate additional electricity and add capacity to the system,” the letter reads. “TVA must disclose how it proposes to provide power to xAI, analyze alternatives … before committing to provide power to xAI.”

The group also argues that MLGW has not obtained proper approvals from its board or the City Council for infrastructure investments related to serving xAI. They also raised questions about whether MLGW ratepayers will be subsidizing millions of dollars in infrastructure investments for xAI.

“Overcommitting to industrial load, as MLGW and xAI have requested, could have serious and even life-threatening consequences for residential customers in Memphis,” the residents wrote.

XAI’s proposed supercomputer will be housed in a 750,000-square-foot site in the south of the city and will house hundreds of thousands of Nvidia GPUs.

Musk himself was in Memphis recently to inspect work being conducted on xAI’s hardware cluster. 

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“I was pulling network cables on Saturday to understand the critical path better,” the Tesla CEO said on X (Twitter).

Ahead of the proposed supercomputer, xAI has developed a cluster that recently came online to power training efforts for its Grok 3 model, which will be released at the end of the year.

This story first appeared in IoT World Today's sister publication AI Business.