Elon Musk slams Bloomberg’s shocking xAI cash burn claims

The xAI supercomputer, Colossus, faces a potential lawsuit from the NAACP and the Southern Environmental Law Center over pollution concerns tied to its gas-powered turbines. The facility has sparked debate over its environmental impact versus economic benefits.

The xAI data center has been operational since last year. The company used pollution-emitting turbines without an air permit, citing a 364-day exemption. Southern Environmental Law Center attorney Patrick Anderson disputed xAI’s exemption, stating: “there is no such exemption for turbines — and that regardless, it has now been more than 364 days.”

The groups issued a 60-day notice of intent to sue under the Clean Air Act, challenging xAI’s permit application under review by the Shelby County Health Department.

According to AP, critics argue the turbines emit smog, carbon dioxide, nitrogen oxides, and formaldehyde, worsening health risks in an area with cancer rates four times the national average.

“The permit itself says emissions from the site ‘will be an area source for hazardous air pollutants,’” the Southern Environmental Law Center noted, alleging Clean Air Act violations.

Opponents claim xAI installed up to 35 turbines—exceeding the 15 requested—without community oversight, straining Memphis’s power grid.

xAI responded: “The temporary power generation units are operating in compliance with all applicable laws.”

The company highlighted its economic contributions, including billions in investments, millions in taxes, and hundreds of jobs. At an April community meeting, xAI’s Brent Mayo underscored that the “tax revenue will support vital programs like public safety, health, human services, education, firefighters, police, parks, and so much more.” He projected that xAI would generate over $100 million in tax revenue by next year. The company is also investing $35 million in a power substation and $80 million in a water recycling plant.

Additionally, xAI is transitioning to sustainable power, particularly Tesla Megapacks. It is actively working on demobilizing the gas turbines.

“The temporary natural gas turbines that were being used to power the [xAI’s] Phase I GPUs prior to grid connection are now being demobilized and will be removed from the site over the next two months,” shared the Greater Memphis Chamber. xAI brought Tesla Megapack batteries and a 150-megawatt substation online earlier this year.

Despite xAI’s expansion to a second 1-million-square-foot site, the lawsuit threat underscores tensions between innovation and environmental justice.