Musk’s xAI gets permit for turbines to power supercomputer in Memphis

Elon Musk’s xAI attained an official permit to power its supercomputer facility in Memphis, Tennessee, using natural gas-burning turbines, according to public records shared by the company on Wednesday.

The Shelby County Health Department issued the permits on July 2, despite months of protests and public hearings where local residents decried the turbines’ impact on local air quality. Musk’s artificial intelligence startup, which now owns his social media site X, will face formal emissions limits, testing requirements and deadlines in order to keep operating 15 turbines at the facility.

The permit says non-compliance with requirements could result in daily fines of up to $10,000 per violation.

People who live near the Colossus supercomputer in Memphis have said that after xAI fired up the turbines, they experienced poor air quality in the area and found it nearly impossible to keep windows open or exercise outdoors due to the stench.

The turbines emit nitrogen oxides and formaldehyde, among other pollutants, according to spec sheets on the website of the installer, Solaris Energy Infrastructure, based in Houston. SEI markets itself as a “power-as-a-service provider,” able to deliver quick deployment of portable, natural gas generators at data centers and other facilities with immediate and significant power demands.

Exposure to high levels of nitrogen oxides, which are precursors to ozone formation, have been associated with higher risk of death from respiratory disease.

The permit was issued a day after the local health department named Bruce Randolph interim director and health officer.

It also landed as xAI faces a pending lawsuit from the NAACP, which says Musk’s company has violated the Clean Air Act with its use of the turbines.

The Southern Environment Law Center, which is representing the NAACP, said in a statement to CNBC that a satellite image from July 1, showed “at least 24 turbines still at the xAI site, more than the 15 allowed by this newly published permit.” The firm previously spotted 35 turbines installed at the facility, with more than 15 operating at a time.

In a statement to CNBC on Wednesday, xAI said it welcomed the decision by Shelby County, adding that, “Our onsite power generation will be equipped with state-of-the-art emissions control technology, making this facility the lowest emitting of its kind in the country.”

After buying X earlier this year in a deal that xAI said valued the combined company at $80 billion, Musk’s startup is seeking to build an even larger datacenter near Colossus, with SEI providing the turbines. This week the company raised a combined $10 billion in debt and equity, according to Morgan Stanley, which led part of the financing.

XAI is aiming to develop products that compete with Google’s Gemini, Open AI’s ChatGPT and other AI systems. The company’s Grok chatbot, powered by the Memphis supercomputer, is integrated into X.

Musk’s other companies are benefitting from xAI’s Memphis buildout. According to financial filings from Tesla, xAI spent “approximately $191.0 million during 2024 and $36.8 million through February 2025” on purchases of the company’s Megapack products, which are giant backup batteries or battery energy storage systems.

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