Memphis City Council members began preliminary discussions during committee meetings Tuesday, July 7, on local zoning plans for data centers.
A planning strategy for the controversial large-scale supercomputing facilities are expected to be included in an update of the Memphis 3.0 comprehensive zoning plan, which aims to build up older or established neighborhoods in the city.
Data centers have proliferated across the nation as AI technology continues to expand. Nashville’s planning commission is debating the rules for new developments as local opposition to data centers grows. Smaller communities in the state, like unincorporated Denmark, are setting boundaries too.
For Memphis, the impact of data centers on residents is the central issue. Several facilities in the city, including Colossus 1 and Colossus 2 owned by SpaceXAI, formerly xAI up until Monday, popped up in recent years with little debate.
Concerns about the facilities continue to grow. Residents living nearby face increased electricity bills, and noise and light pollution. Other worries stem from the facilities’ environmental impacts, such as daily water usage, energy consumption and air emissions. But the Memphis 3.0 zoning plan will focus on residents’ issues.
“We do look at commercial properties, but we’re really more interested in the residential part of it,” said Brett Ragsdale, director of the Memphis and Shelby County Division of Planning & Development.
Considered a novelty use, data centers in the city currently face no zoning rules, which typically address approved locations, permit requirements, site layouts and building dimensions. Landscaping, buffering, setbacks and permissible equipment also are considered.
“We want to make sure there are some guardrails,” said Memphis City Council member Yolanda Cooper-Sutton.“We really need to be aggressive.”
Still, data centers come in a variety of sizes, from behemoth physical enterprises like SpaceXAI to FedEx’s use of cloud platforms, and support critical uses and institutions.
“We have a wide variety of data centers. We have data centers throughout the city that support St. Jude and other types of facilities, but they may be smaller, so how are those integrated into the city,” said Ragsdale.
Council members and city leaders would like to minimize the impact of any zoning rules on smaller operations. They also would like to prevent demonization of their efforts.
“I don’t want us to signal that data centers are bad,” said Antonio Adams, the city’s chief operating officer. “We’ve got powerful data centers, but they are at our hospitals and they save lives.”
Tech giants are a different story for some council members who are eager to install safeguards to prevent data centers’ overuse of natural resources.
Launched in 2023, Colossus 1 and 2 have grown in physical size and computing capacity, and so has their usage of water and energy. Much of the water used to cool the supercomputers is drawn from the Memphis Aquifer, which provides high-quality drinking water for the region.
But the number of employees hired by SpaceXAI has remained relatively low at 3,000 employees reporting to its Southwest Memphis facilities, compared with 30,000 workers at FedEx’s Memphis logistics hub near the airport.
“One of the reasons they are here is because they know we’ve got the aquifer,” said Memphis City Council member Jeff Warren.
The AI company’s Memphis data centers are powered by nearly 60 mobile natural-gas burning turbines. Although they are subject to regulations, they are currently operating without permits.
Warren suggested communities along the Mississippi River determine their own rules and regulations. He also wants SpaceXAI to provide for its own energy needs and keep its promise to build a 1.2 gigawatt power plant – enough energy for about 1 million homes.
But Warren would like SpaceXAI’s energy to come from clean sources.
“Some of these data centers have come online with solar panels and with wind generators, or other things where they can provide their own power without polluting the air,” said Warren, “which is what’s happening now.”
In May, the state legislature passed HB 1847/SB 2128. The law requires data center owners to source and pay for their own infrastructure. Lawmakers hope the legislation blunts the impact of data centers on residential power bills.
