Genesis of the Memphis Project
The Initial Contact
The seeds of the xAI project were sown through a phone call in early March 2024. Troy Parkes, the Greater Memphis Chamber’s Vice President of Global Business, connected with Phoenix Investors, a real estate firm based in Milwaukee. Phoenix Investors had acquired the former Electrolux building at 3231 Paul R. Lowry Road in December 2023 for $35 million, a site that would soon become the heart of xAI’s supercomputing endeavors. The promptness of this acquisition hints at the foresight and strategic positioning that characterized the entire project’s launch. The significance of Parkes’ role should not be understated; it was he who initiated the pivotal conversation, connecting xAI with the ideal location for their ambitious undertaking.
“Project Mando” Takes Shape
Internally, the Greater Memphis Chamber dubbed the development plan “Project Mando.” Later that month, Chamber representatives Troy Parkes and Gwyn Fisher visited Elon Musk’s facilities near Austin, Texas. They toured Tesla, Boring Company, and SpaceX facilities, gaining insights into Musk’s operational ecosystem. The adoption of a codename like “Project Mando” underscores the secrecy and strategic focus surrounding the early stages of the project. This visit to Musk’s other ventures was crucial. By witnessing firsthand the scale and operational intricacies of Tesla, Boring Company, and SpaceX, the Memphis Chamber representatives gained invaluable insights that would inform their collaboration with xAI. It allowed them to better understand Musk’s vision and prepare Memphis to accommodate the unique demands of a project of this magnitude.
Confidential Meetings and Key Players
On March 28, 2024, Gwyn Fisher invited key Memphis Chamber staff, local leaders, and officials to a private meeting. The email described the project as “highly confidential” and “fast moving,” indicating the urgency and sensitivity surrounding the xAI deal. The meeting was pivotal in rallying support and aligning the key stakeholders necessary for the project’s success.
Notable attendees included representatives from the Tennessee Valley Authority (TVA), Memphis and Shelby County Port Commission, City of Memphis public works, Memphis and Shelby County Division of Planning and Development, Memphis Police Department, and the City of Memphis Chief Operating Officer. The involvement of these entities speaks volumes about the project’s scale and its potential impact on various facets of the Memphis community. Each organization brought its distinct expertise and resources to the table, ensuring that the xAI endeavor was comprehensively supported from its inception.
The Path to Announcement
Construction Permits and Utility Contracts
In April 2024, Ohio-based general contractor Darana Hybrid filed construction permits for mechanical and electrical systems work at 3231 Paul R. Lowry Road, estimating costs at $10.2 million. The following month, CTC Property LLC, an affiliate of xAI, entered into utility contracts and a non-disclosure agreement with Memphis Light, Gas and Water (MLGW). These initial construction permits were crucial for adapting the former Electrolux building to the specific requirements of a supercomputer facility. The involvement of Darana Hybrid, a contractor with experience in complex infrastructure projects, highlighted the technical sophistication of the undertaking. Furthermore, the non-disclosure agreement with MLGW underscored the importance of maintaining confidentiality throughout the early stages of development.
Utility Agreements
On May 9, MLGW and CTC Property signed an electricity contract for demands exceeding 5,000 kilowatts. A pipeline agreement followed on May 17, enabling CTC Property to link to MLGW’s existing gas pipeline. The non-disclosure agreement, signed by MLGW President and CEO Doug McGowen and CTC Property’s Dan Rowland, underscored the confidential nature of the project. Securing these utility agreements was a critical step in ensuring that the xAI facility could meet its immense energy and resource requirements. The sheer scale indicated by the electricity and pipeline contracts demonstrated the magnitude of the project and its potential impact on MLGW’s infrastructure.
Elon Musk’s Teaser
On June 2, 2024, Elon Musk hinted at his presence in Memphis with a social media post on X, stating, “I had challah French toast for breakfast in Memphis.” This seemingly innocuous post served as an early signal of Musk’s involvement in the Memphis project, generating buzz and anticipation within the community. It exemplifies his unconventional communication style and his ability to leverage social media to create excitement around his ventures.
Finalizing Agreements
On June 4, 2024, MLGW and CTC Property formalized an electric service agreement for demands of 5,000 kilowatts or greater, bringing the peak demand commitment to 23 megawatts. The formalization of the electric service agreement was a crucial milestone, as it solidified the commitment of MLGW to provide the substantial power necessary for the supercomputer’s operation. This agreement laid the groundwork for the massive infrastructure upgrades that would subsequently be undertaken.
The Official Announcement
The Greater Memphis Chamber officially announced on June 5, 2024, that xAI would build the “world’s largest supercomputer” in Memphis. Elon Musk and xAI staff were absent from the announcement, and the location remained undisclosed due to “global security concerns,” though speculation centered on the former Electrolux building. This public announcement marked a significant turning point, formally introducing the xAI project to the Memphis community and the world. The absence of Musk and xAI staff, attributed to security concerns, added an element of mystery and further fueled speculation about the project’s true scale and potential impact.
Immediate Actions and Infrastructure
MLGW confirmed on June 6, 2024, that xAI planned to construct a greywater facility for cooling equipment. The utility also acknowledged the construction of a substation to meet xAI’s electrical demands. Natural gas turbines were installed at the site in June, with MLGW confirming their usage later in the year. The confirmation of the greywater facility signaled a commitment to sustainable resource management, addressing concerns about water usage in the region. The construction of a new substation underscored the massive electrical demands of the supercomputer and the need for significant infrastructure improvements.
A water service agreement followed on June 10, 2024, allowing for a peak monthly demand of 39,000,062 gallons of water for “data center cooling.” This staggering figure highlighted the immense water requirements for cooling the supercomputer and underscored the importance of the greywater facility in mitigating environmental impact.
Financial and Economic Aspects
Private Funding
The Economic Development Growth Engine for Memphis and Shelby County (EDGE) confirmed on June 21, 2024, that it had not received any tax incentive proposals for the xAI project, indicating that its initial phases would be privately funded. The initial reliance on private funding demonstrated xAI’s confidence in the project’s viability and its commitment to investing in the Memphis community. It also alleviated concerns about the use of public funds for the project.
Job Creation and Tax Revenue
MLGW provided updates at a Memphis City Council meeting on July 23, 2024, estimating that xAI would generate over 300 jobs and contribute $15 million to $20 million annually in local property taxes. Increased electricity sales were projected to yield an additional $500,000 in PILOT payments to the city each year. These projections painted a promising picture of the economic benefits that the xAI project could bring to Memphis, including job creation, increased tax revenue, and additional payments to the city.
MLGW also confirmed that CTC Property was seeking a total of 150 megawatts of electrical demand.
Infrastructure Investments
On August 10, 2024, MLGW President Doug McGowen stated that xAI was expected to pay $7 million monthly for MLGW services. He also confirmed that MLGW had increased the capacity of a substation north of the Paul R. Lowry Road site by 50 megawatts to meet xAI’s demands. He said xAI was paying for transmission line improvements and a new substation to meet its peak demand of 150 megawatts. McGowen noted the presence of 17 gas turbines at the site, intended for temporary use alongside Tesla megapacks. The significant monthly payments to MLGW, coupled with xAI’s investment in infrastructure improvements, demonstrated the company’s commitment to contributing to the local economy and ensuring the sustainability of its operations.
Expansion and Environmental Concerns
Colossus Goes Online
On September 2, 2024, Elon Musk announced that the Colossus cluster was operational, powered by 100,000 H100 Nvidia chips and supporting xAI’s Grok chatbot. The launch of the Colossus cluster marked a major milestone in the xAI project, bringing the world’s largest supercomputer online in Memphis. This announcement generated significant excitement and further solidified Memphis’s position as a hub for technological innovation.
Water Recycling Plans
Preliminary schematics for the “Colossus Water Recycle Facility” were filed with the Tennessee Department of Environment and Conservation (TDEC) on September 18, 2024, with CTC Property planning a $78 million greywater facility. The filing of these schematics demonstrated xAI’s commitment to addressing environmental concerns related to water usage. The $78 million investment in the greywater facility underscored the company’s willingness to prioritize sustainability.
Community Protests
Environmental advocacy groups voiced concerns over water and air pollution, criticizing the Greater Memphis Chamber for a lack of transparency. This protest marked the beginning of a significant movement against xAI, advocating for environmental protection and improved air quality. These protests highlighted the importance of community engagement and the need for transparency in addressing environmental concerns related to large-scale development projects.
Land Acquisition and Environmental Oversight
On October 4, 2024, the EDGE board approved a 21-year land lease for 522 acres southeast of the xAI facility, with CTC Property paying rent after the first year. The U.S. Environmental Protection Agency (EPA) confirmed on October 10, 2024, that it was working with the Shelby County Health Department on concerns over stationary gas turbines at xAI’s facility. The involvement of the EPA demonstrated the seriousness of the environmental concerns and the need for regulatory oversight.
Further Construction Permits
Four construction permits, totaling $294,440,964, were filed on behalf of CTC Property for “Phase 1” work at xAI’s data center on October 14, 2024. The filing of these construction permits highlighted the massive scale of the Phase 1 development and the significant investment being made in the xAI facility.
Security Measures
Sloan Security Group filed a construction permit on October 28, 2024, for a new perimeter fence around the xAI facility, with an estimated cost of $3,960,500. The implementation of enhanced security measures reflected the sensitive nature of the technology being housed at the xAI facility and the need to protect it from potential threats.
Utility Agreements and Expansion Phases
TVA Approval
The Tennessee Valley Authority (TVA) board approved a power agreement with CTC Property for the xAI facility on November 7, 2024, covering arrangements exceeding 100 megawatts. This approval from the TVA marked a significant milestone, ensuring that the xAI facility would have access to the massive amounts of power required for its operations.
Phase II and III Permits
Darryl Cuttell of Darana Hybrid filed three more construction permits for “Phase II and III” at xAI’s facility on November 15, 2024, totaling $95,213,479. The filing of these permits indicated that the xAI project was progressing according to plan and that the company was committed to expanding its operations in Memphis.
Permit Costs
Rita Anderson of the Memphis and Shelby County Division of Planning and Development communicated with various stakeholders regarding permit costs associated with Phase II expansion and perimeter fencing between November 20 and December 6, 2024.
Expansion Announcement
The first confirmation that xAI had doubled in size, with plans to scale up to 1 million graphic processing units (GPUs), came on December 4, 2024. The Greater Memphis Chamber and xAI confirmed the expansion and a potential partnership with Nvidia, Dell, and Super Micro Computer, marking xAI’s first phase of expansion at an estimated $6 billion worth of investment with 320 jobs. This announcement solidified xAI’s commitment to Memphis and its vision for building the world’s most powerful supercomputer. The potential partnership with industry giants like Nvidia, Dell, and Super Micro Computer further underscored the project’s significance and its potential to transform the Memphis economy.
2025 Developments and Community Engagement
Natural Gas Turbine Permits
In January 2025, CTC Property filed an operating permit application for 15 natural gas turbines with the Shelby County Health Department, seeking 24/7 usage. This application sparked further controversy and intensified concerns about air pollution and environmental impact.
MLGW Updates
MLGW provided updates to the Memphis City Council on January 7, 2025, acknowledging some discrepancies in information regarding xAI’s doubled size. The utility confirmed two studies for Phase 1 and Phase 2, each requiring 150 megawatts of power. MLGW also reiterated that gas turbines were temporary and Tesla megapacks were being used to offset power demands.
Zoning Permit
The Greater Memphis Chamber filed a zoning permit for a property at 5420 Tulane Road on January 7, 2025.
Transformer Installations
David Hornady of New River Electrical Corporation filed an electrical permit for four 50-MVA transformers at xAI’s facility on January 15, 2025.
Land Deal and Water Recycling Plant
The Memphis City Council weighed in on a 13-acre land deal with CTC Property for land at 2685 Plant Road on February 4, 2025, intended for xAI’s Colossus Water Recycling Plant. Council members delayed voting after a contentious first reading.
Community Opposition
South Memphis residents and City Councilmember Yolanda Cooper-Sutton voiced opposition to xAI during a Boxtown Neighborhood Association meeting on February 8, 2025.
Land Deal Approval
The Memphis City Council voted unanimously in favor of the 13-acre land deal on February 18, 2025, for xAI’s greywater facility. The $80 million facility was projected to reduce strain on the aquifer by 9%. CTC Property also filed an application for a state operation permit for the Colossus Water Recycle Facility.
Petition Launch
Memphis resident Hailey Thomas launched a petition protesting Elon Musk and xAI on February 19, 2025.
Land Acquisition
CTC Property purchased 186.13 acres along Tulane Road for $79.9 million on February 26, 2025.
Turbine Project Plans
In March 2025, CTC Property filed a preliminary plan for a “simple cycle combustion turbine project” to generate 1.56 gigawatts at 5420 Tulane Road.
Transmission Line Agreement
CTC Property and MLGW entered into a transmission line agreement for a 161-kilovolt line connecting substations on March 4, 2025.
Second Location
The Greater Memphis Chamber announced on March 7, 2025, that xAI was expanding with a second location at 5420 Tulane Road. MLGW confirmed xAI had requested a study of 260 megawatts of power at the Tulane Road site.
Power Requirements
“The Commercial Appeal” reported on March 12, 2025, that xAI would require at least 1 gigawatt of power to meet its 1 million-chip goal.
Town Hall Meeting
Memphis Community Against Pollution hosted a town hall with Memphis Mayor Paul Young on March 22, 2025, during escalating criticism of the xAI project. Mayor Young announced plans to allocate a portion of real estate tax generated to the 38109 ZIP code.
Health Department Critique
Shelby County Division of Health Services Director Michelle Taylor criticized Mayor Young for his handling of xAI in a letter on March 26, 2025.
Utility Contracts
CTC Property and MLGW signed three more utility contracts on March 27, 2025, including electric service agreements for 3231 and 3183 Paul R. Lowry Road and a substation construction agreement.
Social Media Acquisition
Elon Musk announced on March 28, 2025, that xAI had acquired the social media platform X in an all-stock transaction worth $45 billion.
Public Hearing
The Shelby County Board of Commissioners voted on March 31, 2025, in favor of a resolution calling for a public hearing regarding the operating permit for gas turbines at xAI’s facility.
Environmental Concerns and Public Engagement
Clean Air Act Violation Claim
The Southern Environmental Law Center (SELC) submitted a letter to the Shelby County Health Department on April 9, 2025, claiming xAI was using 35 gas turbines and violating the Clean Air Act.
Protest Event
KeShaun Pearson and state Rep. Justin J. Pearson hosted a protest against xAI in South Memphis on April 12, 2025.
Public Notice and Construction Permits
A public notice sign was placed outside xAI’s facility on April 15, 2025, for a 30-day public comment period on the Colossus Water Recycle Plant operations permit. Darana Hybrid filed construction permits for equipment installation and office renovation at 5420 Tulane Road.
Transformer Installations
David Hornady of New River Electrical Corporation filed an electrical permit for four 50-MVA transformers at xAI’s facility on April 16, 2025, for a new MLGW substation.
Site Plan Filing
Amber Henson of Gresham Smith filed an administrative site plan for the Colossus Water Recycle Facility on April 17, 2025.
Chamber Q&A
The Greater Memphis Chamber hosted a virtual Q&A regarding xAI’s expansion on April 23, 2025, addressing concerns over utility usage.
Cooling Systems Permit
Shea Carbognani of xAI filed a construction permit for cooling systems at xAI’s 5420 Tulane Road facility on April 24, 2025.
Public Hearing on Gas Turbines
The Shelby County Health Department hosted a public hearing at Fairley High School on April 25, 2025, regarding the operating permit for gas turbines at xAI’s facility, drawing numerous concerns and criticisms.
Utility Demands and Policy Discussions
Utility Demands Update
MLGW released an update on xAI’s utility demands on May 5, 2025, confirming the company was seeking between 260 megawatts to 1.1 gigawatts of power at its Tulane Road facility. The utility noted that xAI had not submitted a “final request” for electricity use at the site.
Transparency Resolution
The Shelby County Board of Commissioners voted on May 5, 2025, in favor of a resolution to impose public updates from MLGW and TVA regarding utility usage at xAI’s Paul R. Lowry Road facility.
Policy Proposal
Memphis City Councilmember Yolanda Cooper-Sutton proposed a data center environmental reform policy on May 6, 2025, calling for stronger regulations around water usage, water quality, and air pollution monitoring.
Turbine Removal
The Greater Memphis Chamber announced on May 6, 2025, that xAI would begin removing turbines at its Paul R. Lowry Road facility.
Turbine Plans Clarification
The Greater Memphis Chamber clarified on May 8, 2025, that xAI had no plans for gas turbines at its Tulane Road facility.
Partnerships and Leadership Changes
Hyosung HICO Partnership
Hyosung HICO announced a partnership with xAI on May 14, 2025, to supply power transformers.
NAACP Call for Shutdown
Leaders from Tennessee NAACP branches called for an immediate shutdown of xAI on May 29, 2025, criticizing the handling of the project by the health department and MLGW.
Health Department Director Departure
Shelby County Mayor Lee Harris’ offices announced on May 30, 2025, that Shelby County Department of Health director Michelle Taylor was leaving her post.