Inside the Memphis Chamber of Commerce’s Push for Elon Musk’s xAI Data Center — ProPublica

Marilyn Gooch was already skeptical about one of her newest neighbors, xAI’s supercomputing facility, when her cousin walked across the street in June with a blue mailer from the Greater Memphis Chamber of Commerce.

Her cousin didn’t know what to make of the postcard featuring the logos of nine local, state and federal agencies and the chamber’s assurance that billionaire Elon Musk’s artificial intelligence company operated “in full compliance with all applicable federal, state, and local regulations and oversight.” The facility — part of Musk’s bid to dominate the AI market — opened at a breakneck pace almost a year before, brought to Memphis, Tennessee, largely due to the efforts of the local Chamber of Commerce.

Across the country, communities are grappling with the boom of data centers and supercomputing facilities, which consume voracious amounts of electricity and water and can emit smog-producing pollutants. In places from Maricopa County, Arizona, to Prince William County, Virginia, residents have used zoning restrictions as a means to keep supercomputers at bay — an option not available to Memphians because the xAI building was already zoned for industrial use.

Since the opening of the xAI supercomputing facility, Gooch had joined residents and environmental justice advocates sounding off at meetings about potential health impacts of xAI. She learned about the area’s already high concentration of toxic emissions from nearby industrial plants, including an oil refinery, and the county’s high asthma rates.

Of greatest concern: the emissions from the dozens of methane gas turbines — each roughly the size of a semitrailer — that were initially used to power xAI’s new facility located less than 2 miles from her home in southwest Memphis. Based on its analysis of county health ordinances and federal regulations, the Southern Environmental Law Center has asserted in multiple official and legal documents that these turbines violated the Clean Air Act and should never have been allowed; the Shelby County Health Department disagrees.

Gooch saw the mailer as an attempt to quiet their concerns.

In the face of intense public opposition, the chamber has gone to unusual lengths to promote xAI, whose $12 billion investment the chamber believes will transform the shrinking city into a global hub of technological innovation. The chamber wants Memphis to be known as part of the “Digital Delta,” expanding beyond its blue-collar identity as the distribution capital of the country and FedEx headquarters.

This all-out push includes a five-member special operations team to provide what it calls “round-the-clock concierge service” to ensure “seamless execution of the company’s rapid expansion plans.” The chamber also managed xAI’s PR efforts, and while it has not held open public meetings about xAI, it hosted at least 12 invitation-only meetings to tout the project’s benefits to Memphis. And the chamber sent its first mailer in recent memory, which spread incorrect information about the governmental oversight in place to monitor Musk’s new facility.

Former chamber president Beverly Robertson said she can’t recall another instance of the chamber doing such a full-court press for a company — but then again, she and others noted, Memphis has never attracted a company of xAI’s scale.

The public had no input into the opening of the facility in their community. As a private business, xAI had no obligation to seek community feedback, the chamber has said. And because xAI did not seek or receive tax incentives, it wasn’t subject to review from government bodies or elected officials, some of whom learned about xAI’s arrival from the news.

The community’s lone chance to hear from xAI in person came in April during a heated health department hearing about residents’ concerns over the gas turbines. Brent Mayo, an xAI executive, read a statement about the company’s plans to meet the highest emissions standards. He left before the public comment period began.

An xAI spokesperson did not respond to requests for comment about the chamber’s mailer or to questions about the number of gas turbines powering the supercomputer.

In this reliably Democratic and majority-Black city, some residents were upset by Musk’s alignment with President Donald Trump, his brief tenure as the chainsaw-wielding head of the Department of Government Efficiency, and the antisemitic and racist posts from xAI’s chatbot Grok, which is powered by the supercomputer known as Colossus. In response to this criticism, the chamber says it defends projects, not people.

But what dominated the civic discussion was potential damage to the region’s air from xAI’s temporary turbines, especially the nitrogen oxides and formaldehyde they can emit, which contribute to smog. Even with brief exposure, smog increases the risk of respiratory problems, asthma and heart diseases, according to the World Health Organization.

The mailers sent in mid-June to residents in at least two neighborhoods, including Gooch’s, appeared to be addressing those fears, asserting that the chamber “will continue to prioritize compliance with existing standards and policies.”

For seven generations, Gooch’s family has lived in Boxtown, a Black neighborhood in southwest Memphis. Environmental justice activists say Boxtown has been plagued for decades by pollution from nearby industrial plants. In Gooch’s ZIP code, the median household income is just shy of $37,000 and the poverty rate is twice that of the city as a whole.

Gooch took the mailer from her cousin and scanned the alphabet soup of agency acronyms for the nine the chamber claims have “regulatory oversight and authority over xAI’s Supercomputing Facility.” Before retiring, she worked in human resources for 25 years and maintained workplace safety reports. “There’s no way they’re going to be monitoring and looking at all this,” she remembers thinking. “That’s so far beyond their reach.”

Only two agencies on that mailer have clear oversight over xAI’s impact on air quality and public health, the community’s primary concerns. The first is the U.S. Environmental Protection Agency, which under the Trump administration aims to make the United States the world’s AI capital. Local oversight falls to the Shelby County Health Department, which says it is installing a long-awaited air monitor in south Memphis. Both agencies help ensure compliance with the Clean Air Act, the enforcement of which the current administration is weakening as part of a pattern of broader environmental rollbacks.

Two other agencies represented on the card — Memphis Light, Gas and Water Division and the Tennessee Department of Environment and Conservation — told MLK50: Justice Through Journalism and ProPublica that they have no authority over xAI’s supercomputing facility. The other five agencies say they do oversee some aspects of the facility, such as fire safety, zoning or potential whistleblower complaints — none of which address the health concerns that most preoccupied the community.

The “Chamber’s mailer stating MLGW has regulatory oversight and authority over the xAI facility is in error. MLGW does not have regulatory authority or oversight of xAI or any business,” Ursula Madden, Memphis Light, Gas and Water’s spokesperson, said in an email.

Tennessee Department of Environment and Conservation spokesperson Jennifer Donnals said in an email that “TDEC does not have regulatory oversight over supercomputer facilities.” The agency issued a permit related to construction and stormwater management at the Colossus site, she said.

Bobby White, the chamber’s chief government affairs officer, who said he wrote the text featured in the mailer, told MLK50 and ProPublica that he’d used the word regulatory “loosely.” He said the chamber sent the mailers to show residents that xAI didn’t set up shop in Memphis without consulting with anyone.

”It has been my intent to make sure people have understood that the company has essentially abided by rules and law as they currently exist,” White said in a written statement. “I have also in public and private ways tried to advise activists and leaders that changing this company’s or any company’s behavior comes down to changing the policy that allows for it.”

One of xAI’s staunchest critics is State Rep. Justin J. Pearson, who represents a majority-Black district that includes Boxtown. Memphis Community Against Pollution, co-founded by Justin Pearson and now run by his brother KeShaun Pearson, was at the forefront of the fight to get the Shelby County Health Department to deny xAI’s permit for 15 permanent turbines. It was joined by other local groups including Young, Gifted & Green, the Chickasaw Group of the Sierra Club and Tigers Against Pollution.

Justin Pearson said the chamber’s mailer misled residents by including agencies that have no authority or only indirect authority over xAI.

“It’s the red handkerchief of the magician,” Pearson said. “The propaganda that they are putting out to try and convince people that there’s nothing to see here, there’s nothing to worry about, is only at the behest of a multibillion-dollar corporation.”

White said xAI did not ask the chamber to send the mailer and accused environmental activists of misleading residents with claims that “the turbines were somehow operating counter to existing policy and regulations.” He said he got involved after seeing his former sixth grade teacher, church members and community leaders he’s worked with for years at a “raucous town hall meeting on the subject of gas turbines, where people were being whipped into a frenzy and still leaving without good information.”

The chamber emphasized White’s message in a more nuanced way in a July webinar held less than a month after the mailers arrived in Gooch’s neighborhood: “XAl’s presence in Memphis has occurred with the oversight of, input from, and/or strategic alignment with the following agencies/organizations,” read a slide, with the logos of the same agencies.

Chambers of commerce exist to promote businesses and lobby for a pro-business climate, said Darrin Wilson, an associate professor at Northern Kentucky University who studies local economic development. But he said pro-business organizations should still be expected to provide accurate information.

“You want to make sure that the residents of Memphis and Shelby County have 100% accurate and full information around something that is going to impact their day-to-day lives,” he said, “so that they can make decisions for themselves and advocate on their own behalf.”

The chamber maintains that xAI is an indisputable win for the city, expected to create an estimated 500 high-paying jobs and, in the first year alone, generate tens of millions of dollars in city and county property taxes, soaring to as much as $100 million next year. The city’s mayor plans to direct 25% of tax revenues from xAI’s first facility to the neighborhoods closest to the operation. xAI has recently committed to funding repairs and new athletic fields at four neighborhood public schools.

According to press reports, xAI’s presence is continuing to expand in the Memphis area. Its second supercomputer facility, Colossus 2, is expected to come online soon. Musk has announced he’s moving a power plant from overseas to power Colossus 2. And just across the state line in Mississippi, an xAI-affiliated firm purchased the site of a former Duke Energy power plant less than 2 miles from Colossus 2.

After months of weighing whether to approve xAI’s permit request to operate 15 permanent, cleaner turbines, the county health department granted the permit in July. The Southern Environmental Law Center has appealed the permit decision to the Shelby County Air Pollution Control board, an appointed body that hears such protests. The health department did not publicly explain its decision to grant the permit.

The chamber says that xAI has taken a number of steps to address environmental concerns. It claims that emissions from the permanent turbines, which will be a backup power source, will be far less than the maximum the EPA allows. To protect the electrical grid in times of peak demand, xAI is also using Tesla Megapack batteries as another backup power source.

In addition, the company is building an $80 million wastewater facility that will allow xAI, plus the Tennessee Valley Authority and a nearby steel manufacturer, to use recycled water to cool their plants instead of relying on the aquifer the region depends on.

“What we’re really seeing is a company that, quite frankly, is doing as much as you could hope a company would do in terms of being environmentally conscious,” White said.

Still, people in Gooch’s neighborhood have reason to worry about air quality. Last year, the American Lung Association gave Shelby County an F grade for ozone, an air pollutant that contributes to smog. The county also has the state’s highest rate of ER visits for asthma, and the city has been named an asthma capital by the Asthma and Allergy Foundation of America.

In southwest Memphis, the cumulative cancer risk associated with exposure to 13 carcinogens in the air was 4 times higher than the national average, according to a 2013 study by University of Memphis researchers.

“Every family member that I’ve had that lived in the Boxtown area has died of some form of cancer,” Gooch said, acknowledging that some were smokers.

Gooch, a member of the Boxtown Neighborhood Association, attended one of White’s xAI presentations at a nearby church this spring. She remembers White saying that Memphis needs more tax revenue and can’t afford to let xAI, or other companies, slide across the state line to Mississippi.

She’d planned to ask questions, but after listening to White focus on the finances, she decided not to.

“His whole spiel was about money, economics,” she recalled. “Not all money is good money.”