Despite intense public pressure, Memphis City Council members rejected an 18-month moratorium on new data center construction in favor of a drawing up regulations for the controversial tech facilities during a security-laden Tuesday, Oct. 20 meeting.
The council approved an ordinance that includes a 135-day pause on new data center applications.
Council members Jeff Warren and Rhonda Logan introduced the substitute measure during the afternoon committee meetings. In addition to a shortened pause, it combines elements of another more business-friendly proposal.
The ordinance includes much of Warren’s original proposal, which requires investments in closed-loop water cooling systems and a progressive use of renewable energy sources — including the phasing out of carbon-based electricity — to meet data center resource demands. It also aligns with a 90-day executive order by Mayor Paul Young to study the various impacts of data centers. The item was approved in a third and final reading.
Voting in favor were Philip Spinosa, Chase Carlisle, Ford Canale, Janika White, Edmond Ford Sr., Logan and Warren. Those opposed were JB Smiley, Jerri Green, Michalyn Easter-Thomas, Jana Swearengen-Washington and Pearl Walker.
“Now you start the process of writing regulations, which can control these data centers and control what they are doing,” said Warren. “We are also doing this at the advice of people who know what’s going on.”
Still, passage was a disappointment to many city residents in attendance. Most were in favor of a 12-month moratorium. Although outbursts occurred from time to time, the meeting was more peaceful than the last.
After a previous delay on a moratorium vote on Oct. 6, the crowd grew angry. Six people banned from future meetings, including State Rep. Justin Pearson. The Democratic nominee for the 9th congressional district was included with the outcasts after leading chants with a bullhorn. However, a judge issued a temporary restraining order halting the ban earlier in the day.
A motion to move the vote on Warren’s offering to the next meeting was rejected 4-7. Prior to the tally, Smiley defended the need for a moratorium. He explained that his proposal was for more than a “pause” on new construction.
“The moratorium calls for meaningful community engagement. It also requires the council to go into the community and have conversations with people who are approximate to the data centers,” said Smiley.
He was joined by Green, who also criticized the acceptance of the last-minute replacement. Like Smiley, she wanted to afford the assembled audience time to read the proposal.
“When we do things fast, we get things wrong,” said Green. “They want to be able to read it and give input. What they want is a moratorium so that we can talk to the community. That is what they have been asking for for over a year.”
Green is the Democratic Party’s nominee for Tennessee governor to replace the outgoing Bill Lee. During her statewide campaign peregrinations, she has noted an intense backlash to data centers that span the political divide.
The moratorium fell one vote short of passage, 6-6. Voting in favor of the pause were Smiley, Green, Easter-Thomas, Swearengen-Washington, Walker and Logan. Voting against the moratorium were Warren, Spinosa, White, Carlisle, Canale and Ford.
A recent Beacon Center poll reflected 61% opposition to tax breaks for data centers in the typically business-friendly state. A further 70% support laws requiring large-scale demand facilities to cover their own power costs and necessary grid expansion.
Locally, concerns about data centers have swelled since the introduction of the Space XAI data center in 2024. Elon Musk purchased the former Electrolux plant in Southwest Memphis, to house the facility. It uses 15 gas turbines to power tens of thousands of Nvidia GPUs used for AI chatbots. An estimated 800,000 to 1.3 million gallons of water are drawn from the Memphis Sand Aquifer each day to cool the hardware. And that is just the known impact on area resources.
Residents who live near the facility have also complained about negative impacts to air quality and noise and traffic congestion. A recent Shelby County Health Department report ranked XAI as the 28th industry polluter in the county.
Part of the distrust is likely due to the owner too. Musk, the world’s wealthiest man, is also an ally of Republican President Donald Trump. At the start of his second term, Trump appointed Musk to lead DOGE (Department of Government Efficiency), which eventually cut numerous government programs and funding that benefit minorities and the poor. The job was largely seen as a return on an estimated $291 million Musk contributed to campaign spending in 2024.
Then there is the technology itself. Earlier in the year, Musk estimated a 10% to 20% chance that AI could pose catastrophic dangers. He isn’t alone. Many tech leaders who are currently developing AI models concede that artificial intelligence could pose a threat to mankind.
“With artificial intelligence, we are summoning the demon,” said Musk.
