MEMPHIS, Tenn. — xAI has pressed pause on a multimillion-dollar project in Southwest Memphis aimed at protecting our water source. For more than a year, FOX13 has reported on the company’s plans to build a wastewater recycling plant.
“xAI has said a lot of things and it’s time to follow through on the action,” said Sarah Houston, executive director of Protect Our Aquifer.
Back in October, xAI broke ground on the $80 million pledge for the environment. The plant was built to recycle the city’s wastewater, creating greywater to cool the company’s supercomputer.
“It will reduce aquifer withdrawals by 9% and will reduce nutrient loading to the Mississippi River by 20%,” said xAI General Manager Brent Mayo in October. “Zero taxpayer dollars were used for construction or will be used for construction.”
Last year, engineers estimated that Colossus 1 alone needs more than one million gallons of water a day to cool the site. On Thursday, Elon Musk posted on X, “We need to focus on finishing Colossus 2 and ensuring it is extremely stable, then will build the water recycling plant.”
“When you make promises, you have to deliver,” said KeShaun Pearson, the executive director of Memphis Community Against Pollution.
FOX13 interviewed Pearson as he prepared to give a talk at Princeton University on how artificial intelligence data centers can impact the communities around them.
“We are seeing how volatile their plans are and how easily and how quickly they will back out of the promises that they’ve made,” he said.
Without this plant, the executive director of Protect Our Aquifer told FOX13 companies will continue to use drinking water for industrial purposes.
“Our aquifer is some of the purest water in the country,” said Sarah Houston. “Right now, it’s default for industries to come in and use our cheap, pure water.”
The water recycling plant was designed to benefit TVA and Nucor Steel, which also use a significant amount of water. In 2025, engineers said xAI, TVA and Nucor use a combined 13 million gallons of water per day.
“What we want to see is action and follow-through,” Houston explained. “That is what Memphis deserves.”
Mayor Paul Young did not agree to an interview with FOX13, but wrote the following on X:
“Spoke with a number of company reps pushing to ensure xAI delivers on the commitments made to this community. Glad to see their public reaffirmation of the greywater facility. I will keep pressing until this project moves forward.”
On Friday, MLGW President and CEO Doug McGowen to the news and said he was “disappointed” to learn that the project was placed on hold. His full statement is below:
“I am disappointed to have learned through the media that this project is on hold. I understand that any large project can encounter hurdles. It is imperative for our community that the obstacles are overcome and the project restarted. xAI is building this plant because we asked them to, as an alternative to installing wells or purchasing water indefinitely from MLGW. The price tag shouldn’t have surprised anyone. In our very first conversation, we shared that there was an estimate of probable cost of $200M for the facility. The xAI team was optimistic it could be accomplished for $80M.
I am pleased to hear of their recent recommitment to the facility and proud that the City, MLGW and TVA have fulfilled every commitment and delivered on every action necessary for the successful initial operation and expansion of xAI, at no cost to our rate payers or local taxpayers. Further, I am proud that Memphis was the architect for datacenter ratepayer protection legislation. Specifically, Memphis insisted that the costs for all infrastructure needed to support the data center were born by the data center owners, not ratepayers. That model is being codified into law across the nation.
I will continue to advocate for this project as I have when it was first conceived in 2018.”
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