Memphis City Council considering ordinance to pause data center development
Memphis City Council is set to vote on an ordinance that would temporarily halt new data center development within city limits. This proposal follows over two years of rapid expansion by XAI in the region, which has led to significant community concerns and legal challenges regarding water, power, and environmental impacts. The proposed pause aims to allow the city to study these effects and consider future regulations.
The Memphis City Council is preparing to vote on an ordinance that would impose a temporary moratorium on all new data center permits within the city limits. This move comes after more than two years of rapid development and controversy surrounding XAI, Elon Musk's company, which announced plans for the world's largest supercomputer facility in Memphis in June 2024. XAI has since expanded its operations with "Colossus One" in Southwest Memphis and "Colossus Two" in White Haven, and further into South Haven, Mississippi, and DeSoto County, Mississippi, with a $20 billion project announced by Governor Tate Reeves.
The expansion has drawn significant community and environmental concerns, particularly regarding water and power usage. Environmental groups like Protect our Aquifer estimated XAI's facility could require 1 million gallons of water daily, and the Tennessee Valley Authority (TVA) has been working with MOGW to manage electricity demand. Despite these concerns, XAI's operations continued, facing legal challenges, including a lawsuit from the NAACP over gas-powered turbines in South Haven and a separate lawsuit from South Haven residents citing noise and vibrations. The US Justice Department intervened in the NAACP case, citing national security concerns.
In Memphis, the city has collected millions in taxes from XAI and created a special revenue fund for impacted areas. After Tennessee lawmakers passed a law requiring data centers to pay full infrastructure costs, XAI filed permit applications totaling $300 million for proposed work at its Memphis facilities. Mayor Paul Young also indicated XAI is expected to restart construction on a greywater recycling facility. Councilman JB Smiley Jr. stated the proposed pause is not intended to stop economic growth but to allow the city to study environmental, infrastructure, and community impacts and establish more stringent regulations to ensure responsible development. Councilwomen Green, Cooper Sutton, and Chairwoman Janice Swon Washington are reported to be "on board" with the temporary pause.