MEMPHIS, Tenn. — Elon Musk is bringing his new artificial intelligence company xAI to Memphis.
The Greater Memphis Chamber announced Wednesday, June 5, 2024, that Musk is bringing the xAI ‘Gigafactory of Compute’ – what they said is the world’s largest supercomputer – to the city. The Chamber said it's "the city’s largest capital investment by a new-to-market company in Memphis history."
"True" said Elon Musk on X in response to a post about the Memphis announcement.
Though Greater Memphis Chamber President and CEO Ted Townsend would not confirm the location of the build, the Chamber did say it would be at a former manufacturing facility. They also said the investment would not be possible without the support of the building owners Phoenix Investors, which owns only a handful of properties in Memphis, including the former Electrolux site on Paul Lowry Rd. in southwest Memphis.
The Chamber said the project must still be approved by the Memphis Shelby County Economic Development Growth Engine (EDGE), Tennessee Valley Authority (TVA), and governing authorities.
“In less than three weeks, the Chamber’s economic development team demonstrated remarkable coordination, swiftly providing solutions and rallying partners faster than any other community,” said Townsend. “From the initial three weeks until today, Memphis emerged as a global nexus where velocity meets potency, which are attractive attributes to the xAI team.”
“Memphis is a city of innovators, so it’s no surprise that it feels like home to those looking to change the world,” said Memphis Mayor Paul Young. “We like to say that innovation is in our DNA - from the birth of the modern-day hotel, grocery store and overnight delivery to groundbreaking medical discoveries, the blues and rock 'n' roll."
Wednesday, Shelby County Mayor Lee Harris told ABC24, "We need to work hard to negotiate the best deal as we can. He is the wealthiest person in the world and we are one of the communities with the least wealth in the world, and so we definitely want to see what we can do and be hopeful that we can get a good deal."
What is xAI?
xAI was launched in July 2023 by Musk to compete with ChatGPT-maker OpenAI. At the time, Musk said its goal “is to understand the true nature of the universe.”
xAI would be independent from X’s parent company, X Corp., but would work closely with that company, as well as Tesla, “to make progress towards our mission,” according to a statement at the time.
What does this mean for Memphis?
Mark Gillenson, a research professor for the University of Memphis, said a supercomputer used to be described as one large mainframe computer. He said now it's being referred to as a cloud or server farm. He said this announcement about xAI could boost student enrollment on campus.
"This would give us a living laboratory to do further experimentation with, hopefully to have students do internships there and learn more about the technology," Gillenson said.
Gillenson believes bringing a supercomputer to the Bluff City is a once in a lifetime opportunity. He said if the supercomputer is used correctly, it could elevate the city of Memphis.
"The question is, is he going to bring in more people in effect as a think tank or research center to figure out more ways of using the technology?"
The Chamber did not disclose how many jobs this project will bring. However, they did confirm this multi-billion-dollar investment will need data scientists, computation engineers and positions that focus on coding.
Meka Egwuekwe with CodeCrew, a Memphis non-profit organization that teaches coding, tech, and AI to kids and adults, said this initiative could bridge the diversity gap in the tech world.
"We must bring diversity to the table with respect to A.I. so that we can also ensure that we're shaping it around its privacy, ethics and social science concerns," Egwuekwe said.
What does a supercomputer mean for Memphis infrastructure?
Tennessee Valley Authority officials did not comment on specifics for demands the project might have on state systems but said that it could mean maximizing electricity demand response.
"We have been working with MLGW and xAI as we continue to review the details of their proposal and electricity demand needs," said Scott Brooks, TVA media relations. "These discussions include maximizing electricity demand response, supporting load reduction to provide system flexibility when peak demand gets high. As West Tennessee and the entire region continues to grow, our commitment is to ensure that we continue to deliver affordable, reliable energy to all customers."
"We need more investment in infrastructure," said Mayor Harris on Wednesday. "We all see that with the storms and reactions to the storms. I've been talking about that for a very long time that infrastructure is a lot more than the roads the buses convention centers, the schools. We need to do a lot more to ensure our public assets are up to snuff. If we are going to continue to land deals like that, that definitely will be a good conversation."
Some safety concerns
Protect Our Aquifer, Memphis Community Against Pollution, and Young Gifted & Green released a joint statement late Wednesday saying that while they were glad to see the investment into Memphis, there were concerns about the precautions needed to ensure safety.
"As reported by local media, xAI will need up to 150 megawatts of electricity to run its facility — enough energy to power 100,000 homes," the release said. "Before we welcome xAI with open arms, we must consider how an industry using such a tremendous amount of electricity will further impact communities already overwhelmed with pollution and a high energy burden, such as those around the xAI facility in Southwest Memphis. The energy burden measures how much of a family's income goes to paying their utility bill. The national average is three percent, but in Memphis, the average is 27 percent. Will xAI bear the cost of TVA’s fuel adjustment fee in times of high energy demand?
"More so, with our recent history of severe weather events and rolling blackouts, TVA and Memphis Light, Gas & Water’s (MLGW) must work closely with this facility to keep energy use off peak demand hours. In the interest of public health and safety, during times of emergency, our utility providers must have a plan to ensure that residents receive the power and water they need ahead of corporate demand."
The release also cited the large amount of water needed for the system and the air pollution risk.
"xAI is also expected to need at least one million gallons of water per day for its cooling towers from MLGW Davis Wellfield in Southwest Memphis," the release said. "This wellfield is where the Byhalia Connection Pipeline threatened to bisect and where levels of arsenic have been detected in shallow groundwater. At this time, the air quality impacts are unknown. However, we call upon the Shelby County Health Department (SCHD) to immediately assess its oversight and regulatory authority regarding air quality (including but not limited to air permits) and other environmental metrics around the xAI facility to ensure there are no negative public health impacts, drawing on data from the Shelby County Health Department, the Tennessee Department of Environment and Conservation and the EPA EJScreen Tool."
The release said the group encouraged the company to provide transparent reporting on CO2 emission reduction, support investment into wastewater reuse systems to reduce water supply strain, amongst others.
"Lastly, xAI should immediately consider the inclusion of binding community benefits agreements that enshrine its obligations to the local community, including targeted hiring, apprenticeship programs, and funding for neighborhood revitalization efforts," the release said. "We encourage Elon Musk and xAI to build solar for the site and invest in a greywater reuse facility to reduce the strain on the water supply and electric grid along with hiring from low-income and disadvantaged communities to boost the local economy."
Reactions to the announcement
Tennessee Senate Minority Leader Sen. Raumesh Akbari (D-Memphis) issued a statement applauding the project.
“The stage is set for Memphis to become the world leader in artificial intelligence and computing. It’s really impossible to overstate the economic and technological impact of developing the largest supercomputer in the world — right here in Memphis. Grind City is on the verge of adding a new nickname: the Supercomputer City," she said.
Congressman Steve Cohen (D-Tennessee) said the following in a statement: “This is great news for Memphis and the Memphis economy and will make our region a focus for the future of artificial intelligence. Mr. Musk’s smart decision to locate his supercomputer in Memphis will be a boon to our growing tech industry, attract new businesses and create good jobs.”
Tennessee House Minority Leader Karen Camper also made a statement.
“This investment by xAI further affirms my belief in the power of the Memphis area and what it can become... I’ve said numerous times that the arrival of Blue Oval was only the first step in a renaissance for this region," she said.
“Memphis is the Digital Delta,” said Chamber Chief Economic Development Officer Gwyn Fisher. “We are experiencing a dynamic wave of development across various sectors, including technology, infrastructure, healthcare, manufacturing, and education. This monumental recruitment investment marks a pivotal point in our city’s trajectory, and will drive continued entrepreneurship and ingenuity, propelling Memphis to the forefront of global innovation and competitiveness.”
"This historic, multi-billion-dollar investment will put Memphis at the forefront of technology and research while also bringing more jobs and economic development to the region. Projects like this represent the culmination of years of diligent work at both the local and state levels to establish Tennessee as the best place for companies to do business," State Rep. Mark White (R-Memphis) said.