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The Greater Memphis Chamber publicly announced last month that Elon Musk would build xAI's "gigafactory of compute" in the Tennessee city.
The planned facility is set to house what Musk intends to be the world's most powerful supercomputer, set to power xAI's chatbot, Grok. Musk has expressed a goal for Grok to be the "funniest" chatbot and eventually summarize the news on X, formerly Twitter.
At the time of the announcement, the partnership was pending approval from the Memphis-Shelby County Economic Development Growth Engine, Tennessee Valley Authority, and other governing authorities.
Since then, the project has received pushback from some Memphis City Council members who have cited concerns that the project may interfere with the city's water and power supply, Forbes reported Wednesday.
One council member, Pearl Walker, told Forbes that the development caused "hysteria" among Memphis locals.
"People are afraid. They're afraid of what's possibly going to happen with the water, and they are afraid about the energy supply," Walker said at a Memphis Light, Gas, and Water meeting on Wednesday, according to the report.
Forbes said that the data center was expected to require 1.3 million gallons of water a day from the county's main water supply, though xAI has a verbal agreement to create a power substation and a gray-water-processing facility, which could change that.
This isn't the first time concerns about the project's impact on the surrounding area have been voiced. In an open letter shared on X, a group of three Memphis environmental groups also expressed concerns about the factory's impact on the local power supply. The letter mentioned concerns about the city's ability to maintain power through "severe weather events and rolling blackouts" with a facility requiring so much power in the area.
xAI's factory may need up to 150 megawatts of electricity an hour at peak times, roughly the amount needed to power 100,000 homes, The Commercial Appeal, a local publication, reported. Memphis Light, Gas, and Water is trying to prevent the factory from affecting the local power grid, the outlet added.
Musk's future computing gigafactory isn't the only AI data center that requires large amounts of power. Meta's 2023 environmental-data report said a facility in Iowa burned as much power as 7 million laptops running eight hours a day, according to a report from The Washington Post.
AI data centers are driving a surge in US electricity demand and could exceed supply within two years at the current pace, Bernstein Research said. A Goldman Sachs report found a single ChatGPT query used nearly 10 times the amount of electricity needed for a Google search.
Still, the concerns haven't stopped Musk from moving forward with the plan as he looks to compete in the artificial-intelligence arms race with rivals such as OpenAI and Meta. Construction began almost immediately after the deal was finalized in March, Forbes said.
Ted Townsend, the president of the Greater Memphis Chamber, told Business Insider at the time of the announcement that the city was chosen because it had an "ideal site" and could keep up with Musk's aggressively fast pace in completing the project.
The billionaire has previously shared plans to have the supercomputer running by fall 2025, though many of his estimates have been overly ambitious in the past and have been pushed back.
xAI did not respond to a request for comment.
