Elon Musk’s artificial intelligence startup xAI is under fire in Memphis, Tennessee, after an environmental advocacy group accused the company of running dozens of unpermitted gas turbines at its massive data center — raising serious air quality concerns for local residents.
According to a letter sent this week by the Southern Environmental Law Center (SELC) to the Shelby County Health Department, xAI has installed 35 gas turbines at its Memphis facility, despite only applying for permits to temporarily operate 15 turbines.
Data center emissions rival a power plant
The SELC says that aerial imagery and other data confirmed the presence of 35 turbines at the site, known internally as Colossus. These turbines are estimated to generate 421 megawatts of power — comparable to an entire Tennessee Valley Authority (TVA) power plant.
The turbines, according to manufacturer data cited by SELC, emit between 1,200 and 2,000 tons of smog-forming nitrogen oxides (NOx) per year. That would make xAI the single largest industrial emitter of NOx in Memphis — a city already struggling with industrial pollution.
NOx emissions are particularly concerning because they are precursors to ozone and smog formation, and prolonged exposure is linked to respiratory diseases and increased mortality risks.
Local residents sound the alarm
At a public hearing on Wednesday, residents living near the xAI facility expressed anger and fear over the potential health impacts.
Easter May Knox, a nearby resident, told officials:
“When I open up that window, I smell everything but the right thing and the right thing is the clean air. Elon Musk has all the money. He’s a millionaire, billionaire, whatever kind of -aire he is. But we need clean air!”
Residents also criticized xAI management for failing to engage with the community. Brent Mayo, xAI’s senior manager overseeing infrastructure in Memphis, reportedly ignored direct outreach from locals and did not attend the public hearing.
xAI faces possible Clean Air Act violations
The SELC claims xAI is likely in violation of the Clean Air Act as well as Shelby County’s strict preconstruction permitting requirements for major pollution sources. Amanda Garcia, an attorney with SELC, said:
“The Shelby County Health Department is the local entity charged with implementing the relevant air permitting requirements, and has the authority to hold xAI accountable under existing law.”
Neither xAI nor the Shelby County Health Department responded to requests for comment from CNBC.
Musk founded xAI in 2023 as part of his push to compete directly with OpenAI, the company he co-founded in 2015 but later parted ways with. In late March 2025, Musk merged xAI with his social network X (formerly Twitter) in an $80 billion all-stock deal, further raising xAI’s profile and resources.
The Memphis facility has been critical to xAI’s ambitions. Last year, the company began training its AI models using 100,000 Nvidia H100 GPUs at the site. While xAI’s long-term plan is to transition to power from Memphis Light, Gas and Water and TVA, the turbines were supposed to be a temporary solution.
Now, with 35 turbines running — more than double what was permitted — Musk’s latest project finds itself embroiled in environmental controversy, adding to the list of regulatory clashes involving his other companies, including Tesla and SpaceX.
The Shelby County Health Department now faces pressure to investigate and potentially enforce penalties against xAI. The SELC is calling for immediate action to protect the health of Memphis residents.
As Musk continues his efforts to build xAI into a global AI powerhouse, the situation in Memphis highlights a growing question for the billionaire’s ventures: Can innovation and environmental responsibility coexist?
