Overview:
Elon Musk’s massive AI infrastructure buildout has transformed South Memphis with little regulation and plenty of controversy. Now, after learning about his latest project after the fact, Black city leaders want time to establish some ground rules.
When Elon Musk opened his first SpaceXAI data center in South Memphis about two years ago, the city had no real regulations for such facilities, but it didn’t seem to matter. The facility was built in an old Electrolux manufacturing plant in an area already zoned for industrial use near Boxtown, a historically Black neighborhood founded by freedmen in 1863.
To power the data center, however, SpaceXAI installed dozens of gas turbines without a permit, triggering protests and a lawsuit. That’s when the city’s drama around Musk, data centers and power — literally and figuratively — began.
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Now, as SpaceXAI announced surprise plans for a fourth data center on land his company already owns, the city’s council is considering hitting the pause button on new data center development.
At a meeting earlier this month, Memphis City Councilmember JB Smiley, Jr., cosponsored a moratorium that would block data center construction for one year. He said Musk and SpaceXAI kept elected officials in the dark about the new proposal, and that he only learned what was coming after Musk announced it.
No Respect
“I think the council deserves to be treated with respect by the folks who are pushing the data centers in our community,” he said at an August 18 council meeting where the members first proposed the moratorium.
“We can’t say we represent people if we’re not doing our job as the representatives of a group of people,” Smiley said.
Smiley crafted the bill, along with Council Chairwoman Jana Swearengen-Washington and Councilmember Jerri Green, who is also the Democrats’ candidate for Tennessee governor. Smiley and Swearengen-Washington are both Black.
We owe residents a full review of noise, environmental impact, and infrastructure strain.
Jana Swearengen-Washington, Memphis City Council chair
A growing number of states and local governments are considering or imposing moratoriums on new data centers as concerns mount over their enormous electricity and water demands, environmental impact and potential effects on utility bills.
Nationwide Trend
At least 15 states have considered statewide pauses or similar restrictions, while communities from California and Colorado to Florida, Indiana and Wisconsin have enacted temporary local bans to study the consequences before approving more projects.
In Maryland, Prince George’s County has enacted a two-year pause on hyperscale projects, while Montgomery and Calvert counties have considered or adopted their own temporary restrictions.
Swearengen-Washington said the pause will allow the city to do its due diligence and analyze the proposed fourth data center’s environmental impact.
“We owe residents a full review of noise, environmental impact, and infrastructure strain,” she said, emphasizing the legislation doesn’t block any new projects. “So this moratorium is not a ban, but it’s a pause,” she said.
If passed, it would put new projects on hold for one year, giving the city time to develop data center-specific regulations that account for issues such as environmental and noise pollution, buffer zones from residential areas, and more.
The proposal met little resistance in this first council meeting.
Broad Local Support
After it passed out of committee, all thirteen council members voted for the moratorium on the first full reading of the ordinance. To pass into law, a measure must be read and voted on by a majority of council members three times.
The local Chamber of Commerce, which played a key role in bringing Musk to Memphis, is urging the council members to vote “no” on the moratorium.
State Rep. Justin D. Pearson, who represents Boxtown in the state legislature and who is now running to represent South Memphis in Congress, backs the moratorium. He lives three miles from Colossus 1, the first data center Musk built in metro Memphis.
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That facility “now requires over 300 Megawatts of power to operate and millions of gallons of fresh drinking water to cool,” Pearson wrote in an op-ed supporting the moratorium for the Memphis Commercial Appeal.
“Add the power required to operate Space XAI’s three additional data centers MACROHARD, MACROHARDER, and MINIHARD,” he wrote, “and that number rises to 2 gigawatts of power—enough to power 1 million homes.”
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