A major US environmental regulator has delivered a significant ruling against Elon Musk's artificial intelligence company, xAI, declaring its use of dozens of unpermitted methane gas turbines to power massive data centres in Tennessee illegal.
EPA Closes 'Portable' Generator Loophole
The US Environmental Protection Agency (EPA) announced its decision on Thursday, fundamentally revising policies around gas turbines. The agency stated that operating such machines requires air quality permits even if they are used on a temporary or portable basis, directly countering xAI's long-standing argument.
For over a year and a half, xAI had been contesting the need for permits for truck-sized gas turbines parked near its 'Colossus 1' and 'Colossus 2' facilities. The company exploited a local county loophole in Memphis that allowed generator operation without permits provided the equipment did not remain in one place for more than 364 days.
At the peak of this activity, up to 35 of these portable generators were powering the Colossus 1 data centre. The company later obtained permits for 15 turbines at that site and is currently operating 12 permitted machines there.
A Victory for Memphis Community Activists
The EPA's ruling represents a hard-won victory for community and environmental activists in Memphis, who have opposed the turbines since their installation. They argue the data centres, situated just miles from historically Black neighbourhoods, add harmful pollution to communities already bearing a disproportionate environmental burden.
"Our communities, air, water, and land are not playgrounds for billionaires chasing another buck," said Abre' Conner, Director of Environmental and Climate Justice for the NAACP. The NAACP initiated a lawsuit against xAI in July of last year, alleging the unpermitted turbines violated the Clean Air Act.
Methane gas turbines emit nitrogen oxides, pollutants linked to serious health issues including cancer, asthma, and other respiratory diseases. An EPA spokesperson told The Guardian that the new ruling is estimated to result in net annual reductions of nitrogen oxide emissions by up to 296 tons by 2032.
The Scale of xAI's Power Demand
For xAI, the creator of the Grok chatbot, the turbines are deemed essential to supply the colossal power demands of its supercomputers. The Colossus 1 facility alone, built in a record 122 days during the summer of 2024, uses 150 megawatts of electricity at full capacity—enough to power approximately 100,000 homes for a year.
The company's expansion is rapid. The even larger, 1-million-square-foot Colossus 2 facility is under construction on the Memphis border in Southaven, Mississippi, and is also powered by dozens of gas turbines. Reports indicate 59 generators are on site, with 18 considered temporary and operating without air quality permits. A third xAI data centre in Southaven began construction last week.
Amanda Garcia, a senior attorney with the Southern Environmental Law Center, which filed its intent to sue alongside the NAACP, stated the ruling "makes it clear that companies are not – and have never been – allowed to build and operate methane gas turbines without a permit." She emphasised there is no loophole allowing corporations to set up unpermitted power plants.
The new federal oversight means permitting for these turbines will now fall under stricter federal law, though enforcement details and potential penalties for non-compliance remain unclear. xAI did not respond to requests for comment on the ruling.
