A temporary moratorium on data centers cleared a preliminary hurdle with unanimous approval from the Memphis City Council on Tuesday, Aug. 18.
The 12-month pause will allow time for a comprehensive study of the impact of data centers on residents. Regulations, which currently do not exist, are expected to be drawn from the study’s conclusions.
Twelve data centers currently operate in Memphis.
“My only goal is to bring the foremost experts into the room … and those individuals that have to implement those regulations and those individuals that understand the impact to the environment … We want everybody in the room when those conversations are had,” said council member JB Smiley.
The council approved the agenda item 7-0 on its first vote during the afternoon executive session. The resolution is sponsored by Jana Swearengen-Washington, Jerri Green, the 2026 Democratic nominee for Tennessee governor, Yolanda Cooper-Sutton and Smiley.
The work in progress calls for the formation of a panel, including council members, MLGW officials and industry experts. Amendments will likely be proposed before the next two votes.
“We can’t just hop up on the expressway without abiding by the laws,” said Smiley. “We can’t live in the community without abiding by laws. And I just think the same should be said for billion-dollar companies that come into our community.”
The expansion of the Colossus 2 data center into Whitehaven prompted a quick response from the council. The property meant for expansion is adjacent to the existing facility. Members appeared to be caught off guard by the July 31 announcement, the latest development proposed for Elon Musk’s cluster of data centers.
“To those of you that are here today, I hope you heard that we were left in the dark,” said Green. “That’s just like you, we found out in the newspaper.”
The rapid expansion of data centers feels like a “tipping point,” said Green, who also compared the current period to an earlier era of unfettered capitalism.
The Colossus 1 data center, located along an industrial corridor at 3231 Paul R. Lowry Road, was announced in the fall 2024. Each development since has unfolded with little or no debate by elected officials or the public.
Still, a surge of data center developments is happening across the nation. Local communities have begun to respond with ordinances and similar moratoriums.
The issue also cuts across political lines. Many conservative communities have also expressed apprehension with the largely unregulated facilities.
“It reminds me of the beginning of the industrial revolution, which caused enormous human harm,” noted Green.
Concerns about data centers are manifold. Along with the environmental impact from 41 planned natural gas turbines, 800,000 to 1.3 million gallons of fresh water is pumped out of the Memphis Aquifer daily.
“We’re navigating this largely through one company. We need standards before the next eleven expand,” said Swearengen-Washington.
The fresh water cools around 550,000 Nvidia graphics processing units, commonly called GPUs, used to power the data centers. Musk plans to scale up to 1 million chips for the supercomputer, which is developing and training artificial intelligence models for the Grok chatbot.
A planned 13-million-gallon wastewater plant for cooling towers would alleviate aquifer usage concerns. But its construction was postponed in April by Musk and his AI company.
Air and noise pollution from the whirring gas turbines that run 24 hours a day add to the concern. The data center is also MLGW’s single largest customer. The increased demand not only puts extra strain on the grid, but also results in higher rates for other rate payers.
“XAI’s second data center site, it requested 1.1 gigawatts from MLGW. For perspective, in 2023 MLGW provided 7.6 gigawatts to commercial and industrial customers. One facility would equal 15% of that total demand,” said Swearengen-Washington. “TVA says 150 megawatts alone powers about 90,000 homes.”
Meanwhile, hopes for job creation failed to materialize as the dust settled from construction. The data center currently employs between 30 to 50 people, including technical staff and security officers.
