Elon Musk’s AI company, xAI, is facing possible legal action for violating the Clean Air Act at its “Colossus” data center in Memphis, Tennessee.
xAI Accused of Air Pollution Near Black Community
The Southern Environmental Law Center (SELC), on behalf of the NAACP, has warned Elon Musk’s xAI of a possible lawsuit. They say xAI ran over 35 gas-powered turbines without getting the required air permits.
These turbines powered the company’s data center before it was connected to the main grid. According to SELC, the turbines released harmful chemicals like nitrogen oxides and formaldehyde. They also claim xAI broke Clean Air Act rules by not using pollution controls and ignoring government warnings.
The data center, called Colossus, is close to Boxtown — a mostly Black neighborhood already dealing with air pollution. The NAACP says this is a case of environmental racism and is demanding court action, fines, and legal fees.
Demand for data centers is growing fast, mainly because of the rise in AI and cloud computing. Elon Musk’s xAI is building a second, much larger data center in Memphis called Colossus 2, which will need at least 1 gigawatt of power.
Surging AI Demand Puts Pressure on Data Centers
The U.S. Department of Energy expects data center demand to double or triple by 2028. By 2030, global investment in data centers may need to hit $6.7 trillion, according to a McKinsey report.
Nick Ruck from LVRG Research said that AI is pushing data demand to new heights, but many AI companies are struggling with rising costs and limited power supplies. He added that AI could lead to a 165% jump in data center demand by 2030.
Companies like Amazon are turning to new solutions to meet energy needs. Amazon recently partnered with Talen Energy to power its AI data centers in Pennsylvania with nuclear energy through 2042 and announced plans to invest over $13 billion in AI and cloud projects in Australia.
Meanwhile, xAI records a spending of about $1 billion every month and could lose up to $13 billion next year. To cover the costs, it’s trying to raise $9.3 billion, but plans to spend more than half of that in just three months. Most of the money is going into building data centers and buying powerful chips to train its AI.
Right now, xAI is making very little, around $500 million this year, while rivals like OpenAI are expected to make over $12 billion. xAI recently joined with Musk’s social app X to use its data for training AI, which could save money. Still, the company says it could become profitable by 2027.
