Two days before a highly anticipated public hearing on the future of xAI’s operations in Memphis, the Greater Memphis Chamber hosted a webinar to address widespread questions and community concerns. Titled “Asked & Answered,” the forum tackled everything from xAI’s use of aquifer water to the controversial gas turbines operating at the facility in Southwest Memphis.
Moderated by journalist and tech entrepreneur Kontji Anthony, officials from the Memphis Chamber, environmental experts and others were peppered with questions over about 30 minutes.
“This is the biggest economic development project in Memphis history,” Anthony said in her opening remarks. “But it’s not without controversy — especially around environmental concerns. Our goal today is to make sure the community hears directly from those involved and gets answers.”
With the Shelby County Health Department set to host a public hearing at Fairley High School this evening, the chamber hopes to change the narrative around the supercomputer facility. Here’s what they said about some of the most pressing issues:
Is xAI draining the Memphis Sand Aquifer?
One of the most persistent rumors is that xAI is using 1 million gallons of water per day from the aquifer to cool its supercomputer. Bobby White, Chief Government Affairs Officer for the Chamber, said flatly: “That is not true.”
White clarified that while the former Electrolux property (where xAI is located) had a water use allotment of up to 1 million gallons per day — just like other industrial tenants in the area — xAI is not using it.
“They’ve installed a closed-loop cooling system,” White explained. “They brought in their own potable water. It comes in, it cools the equipment, it heats up, then gets recirculated back through chillers. They’re recycling water. Their monthly water bill is less than $1,000 — probably less than what most of us pay at home.”
He also highlighted xAI’s $80 million investment in what will become one of the world’s largest wastewater recycling facilities. The facility, once complete, will provide up to 13 million gallons per day of recycled water—not just for xAI, but for TVA and Nucor Steel as well.
“That facility will help save 4 to 5 billion gallons of aquifer water annually,” White said.
What about the gas turbines — are they polluting?
Concerns over air quality have centered on the presence of up to 35 natural gas turbines at xAI’s current site — 15 of which are operating in what some community environmental advocates have called a regulatory loophole.
Environmental consultant Shannon Lin, a 30-year veteran of Clean Air Act permitting, broke down the details. He explained that the 35 turbines are temporary units allowed under EPA guidelines to operate for up to 365 days without a permit.
“These temporary turbines were brought in to bridge the power gap while permanent substations are being built by MLGW and TVA,” Lin said. “They’re not subject to permanent stationary source permitting because they’re temporary by design.”
That said, xAI has submitted an air permit application for 15 permanent turbines. Lin stressed that these will be fitted with state-of-the-art emission controls, including Selective Catalytic Reduction (SCR) technology that will reduce nitrogen oxide (NOx) emissions to just 2 parts per million (ppm).
“The federal standard is 25 ppm. These turbines will run at 2 ppm,” Lin said. “That’s lower than standards in California or Texas. It’s one of the most stringent emissions controls anywhere in the country.”
The permit application also includes emissions data and an environmental justice analysis, which Lin said found no significant adverse impacts.
Why did this deal happen so fast — and in secret?
Another source of community tension has been the perception that xAI moved into Memphis under a veil of secrecy, with little or no public input. Ted Townsend, president and CEO of the Greater Memphis Chamber, acknowledged the concern but defended the use of non-disclosure agreements (NDAs).
“NDAs are standard practice in economic development,” Townsend said. “They protect market-sensitive information and preserve negotiating leverage. We don’t want a competitor finding out about a deal before it’s finalized.”
“Confidentiality is actually really important when it comes to economic development projects,” White said earlier. “We’ve had unfortunate experiences in the past where projects and information about them have slipped and become public knowledge, and we’ve lost projects.”
Townsend emphasized that once regulatory filings like permit applications are submitted, they become public record.
“The permit is public. The emissions data is public. And now we’re hosting forums like this to ensure that people have the facts.”
What is xAI doing about energy strain?
Operating the world’s largest supercomputer takes an enormous amount of electricity. Panelists addressed concerns about how xAI’s energy demands might strain Memphis’ power grid.
“This facility now has the largest installation of Tesla Megapacks in the world,” Townsend said. “That’s 700 grid-stabilizing batteries on site.”
He also noted that xAI is exploring renewable energy options, including the development of a solar farm.
“The long-term goal is to operate sustainably and not be reliant on fossil fuels. These turbines, once permitted, will primarily be for backup.”
Lin added: “Even at full scale — 10 times the current GPU usage — the 15 permitted turbines will be sufficient. They won’t need to add more.”
How does the community benefit?
Townsend pointed out that xAI is already the second-largest taxpayer in Memphis, behind only FedEx.
“In just under a year, xAI has contributed $33 million in new property taxes,” he said. “$17 million to the county, $16 million to the city. That revenue helps fund schools, parks, and libraries.”
Mayor Paul Young has proposed a resolution that would allocate 25 percent of xAI’s net new tax revenue directly to projects in the 38109 ZIP code, where the facility is based.
“That’s what economic development should look like,” Townsend said. “Growth that lifts the communities it touches.”
What happens next?
The Shelby County Health Department will host a public hearing on xAI’s draft air permit at 5 p.m. today at Fairley High School. Community members will have the opportunity to voice support, raise concerns, and ask questions directly to health officials and company representatives.
“We want full transparency. The company (xAI) wants full transparency,” Townsend said. “We know that we’ve brought in a good actor.”
“Those that have had concerns, their voices are important,” Townsend continued. “It’s why we’re investing in this very webinar today. It’s why we’re showing up at the public hearing on Friday.
“We have nothing to hide.”
You can watch the video of the webinar here:
