Updated July 22 to remove the purchase price. The price was not disclosed in public records.
Elon Musk’s artificial intelligence company xAI is expanding in the Memphis, Tennessee, area with the purchase of a former Duke Energy site that includes connections to a natural gas-power plant.
The deal comes at the multi-billionaire seeks to build one of the world’s largest supercomputers, requiring access to significant power reserves. The company's plans to tap natural gas have drawn opposition from the NAACP, which has appealed a Memphis-area authority's decision to allow xAI to use gas turbines for its supercomputer projects near majority Black neighborhoods, saying the power infrastructure contributes to air pollution and public health problems.
In the property acquisition, MZX Tech LLC purchased a 114-acre site in the Memphis suburb of Southaven, Mississippi, for an undisclosed price, according to public records. A deed filed on July 18 with DeSoto County, Mississippi, where the property is located, names xAI as the managing member of MZX Tech. The seller was Julie M. James of Hernando, Mississippi.
The property was previously occupied by Duke Energy and contains electric-power transmission lines that connect to a Tennessee Valley Authority combined-cycle natural gas plant at 2882 Stateline Road, about a mile away.
Company officials at xAI did not respond to an email request for comment.
Musk's firm is developing supercomputers in projects nicknamed as Colossus in the Memphis area to power AI applications, such as xAI’s Grok chatbot. Colossus includes two separate data centers in Memphis and the first property, at a former Electrolux plant in southwest Memphis, started operations in June 2024.
Data centers equipped with supercomputers that can power AI applications require immense amounts of electric power. The Tennessee Valley Authority and Memphis Light, Gas and Water previously reached agreements with xAI for power supply.
Supercomputer projects also require transmission lines and other infrastructure to create direct connections to power plants. Musk's firm formed a joint venture with Houston-based Solaris Energy Infrastructure, called Stateline Power, to serve as development partner for the Colossus project. Stateline Power in May obtained of loan of up to $550 million from Stonebriar Commercial Finance to purchase equipment for the data centers, according to a regulatory filing.
Community groups in Memphis oppose xAI’s project because the company uses gas turbines to power the data centers. The turbines emit methane that causes air pollution that can lead to health problems, the NAACP said. The southwest Memphis area where xAI is located already has some of the highest asthma rates in Tennessee, according to public health groups.
The NAACP and Young, Gifted & Green last week filed an appeal challenging the Shelby County Health Department’s approval of a permit for xAI to use gas turbines. The permit would allow xAI to run 15 gas turbines around the clock, 365 days a year.
"We will persist until the health department and every other agency follow the law and we will ensure that the safety and well-being of Black people are not treated as secondary to the profits of Elon Musk's xAI," NAACP CEO Derrick Johnson said in a statement.
For the record
Husch Blackwell; Bridgforth, Buntin & Emerson; and Austin Armistead Law were legal counsel on the property sale. The Southern Environmental Law Center represents the NAACP.