Elon Musk’s xAI accused of worsening Memphis smog with unauthorized gas turbines at data center
Elon Musk announced his new company xAI which he says has the goal to understand the true nature of the universe.
Jaap Arriens | Nurphoto | Getty Images
Elon Musk’s artificial intelligence startup, xAI, is being accused by environmental and health advocates of adding to the pollution problem in Memphis, Tennessee, by using natural gas burning turbines at its new data center, and doing so without a permit.
The company said it was opening the data center in June in a former Electrolux factory, shortly after announcing it had raised $6 billion at a $24 billion valuation. In a post on X last month, Musk boasted that xAI had begun training its AI models at the facility using 100,000 of Nvidia’s H100 processors.
The Southern Environmental Law Center sent a letter this week to the Health Department in Shelby County, where Memphis is located, and to a regional office of the Environmental Protection Agency on behalf of several local groups, asking regulators to investigate xAI for its unpermitted use of the turbines and the pollution they create.
The letter notes that xAI “has installed at least 18 gas combustion turbines over the last several months (with more potentially on the way).”
The company has been using the turbines to power the facility, but its long-term plan is to use power from the local utility, Memphis Light, Gas and Water and the Tennessee Valley Authority.
MLGW told CNBC that it started providing 50 megawatts of power to xAI at the beginning of August. However, the xAI facility requires an additional 100 megawatts. The utility has installed more circuit breakers, and started making improvements to transmission lines in the area to prepare for the added power consumption by xAI, as well.
Musk, who is also the CEO of Tesla and SpaceX and owner of social media company X, started xAI in 2023 to develop large language models and AI products that aim to compete with those from Google, Microsoft and OpenAI. The company’s initial product is a chatbot called Grok, billed as a politically incorrect alternative to OpenAI’s ChatGPT. AI models generally require massive amounts of power for data training and processing.
“This plant requires an enormous amount of electricity,” the advocates wrote in the letter.
Some of the 18 turbines are visible from the road around the property and, according to the advocates’ letter, emit air pollutants called nitrogen oxides (NOx) that add to a longstanding smog problem in the area. Shelby County has been given an “F” grade by the American Lung Association for its smog.
According to the Centers for Disease Control and Prevention’s website, even low levels of nitrogen oxides in the air can irritate a person’s eyes, nose, throat and lungs, causing them to cough, experience shortness of breath, tiredness and nausea. Breathing high levels of nitrogen oxides can cause “rapid burning, spasms, and swelling of tissues in the throat and upper respiratory tract,” and other serious health problems, the agency says.
Businesses in Tennessee are typically required to obtain permits to operate the types of turbines used by xAI. The permits would establish the allowable concentration of emissions, and determine efficiency requirements for the engines.
‘Significant health and environmental impact’
A permit would also mandate air quality testing to make sure users aren’t polluting more than they had planned to in the area due to issues like poor engine maintenance.
“The overarching concern remains that there has been very little transparency and opportunity for public input for the xAI project,” Amanda Garcia, a senior attorney with the Tennessee office of the Southern Environmental Law Center, told CNBC. The added concern, she said, is that it’s “already having significant health and environmental impact on the surrounding community.”
The groups wrote in the letter that the xAI turbines already in place have the capacity to emit an estimated 130 tons of nitrogen oxides annually, which would rank them as the ninth-largest source of the pollutants in the county. Their combined capacity could power around 50,000 homes.
Musk-led companies have a history of building facilities or operating high-emissions equipment without obtaining permits first.
CNBC reported earlier this month that SpaceX operated a water deluge and cooling system at its launch facility in Boca Chica, Texas, repeatedly discharging industrial wastewater there without a permit, a violation of the Clean Water Act.
Musk’s tunneling venture, The Boring Co., was also fined by Texas environmental regulators for a similar issue — discharging wastewater into the Colorado River in Bastrop, Texas, without applying for permits or installing appropriate pollution controls.
Tesla was cited by a California air pollution regulator in 2021 for installing and modifying paint shop equipment that emitted hazardous air pollutants, without a permit and reviews as required by the Clean Air Act.
The EPA regional office covering Memphis didn’t respond to a request for comment. Nor did xAI.
WATCH: Musk should ‘get back to building affordable electric vehicle’s over investing in xAI
A Tesla Cybertruck sits on a lot at a Tesla dealership on April 15, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Tesla shares slid more than 2% Tuesday after a report that the electric vehicle maker was halting production of Cybertruck and Model Y models for a week in Austin, Texas.
The production stoppage begins June 30, Business Insider reported, citing a staff meeting where the announcement was made. The pause, which is for maintenance on production lines, would be the third such shutdown at the Austin facility in the past year, according to BI.
Tesla is tentatively launching the robotaxi in Austin on June 22, using Model Y vehicles equipped with a new version of the company’s “Full Self-Driving” technology.
CEO Elon Musk shared a video clip on X last week of a Model Y robotaxi on a road in Austin, adding to the buzz for the promised launch.
CNBC has reached out to Tesla for comment on the reported pause.
Read the full BI story here.
Tesla year-to-date stock chart.
Thomas Fuller | Lightrocket | Getty Images
Reddit shares popped about 5% after the social media company debuted new artificial intelligence-powered advertising tools.
The two new features, announced Monday in a post during the Cannes Lions festival, will help brands better leverage discussions on the platform. The company said the tools are powered by an engine called Reddit Community Intelligence that turns “posts and comments into structured intelligence.”
Reddit announced a “listening tool” called Reddit Insights, which shares real-time insights with marketers to help them identify trends and launch campaigns. The other tool, called Conversation Summary Add-ons, allows brands to show “positive” user content under their ads.
“These are tools for a new era of community marketing, one where brands can tap into Reddit’s authenticity and connect meaningfully with high-intent communities around the world,” the company wrote.
The company said Publicis served as the exclusive alpha tester for Reddit Insights, while Lucid and Jackbox Games were among the early testers for Conversation Summary Add-Ons.
Companies across industries are betting on new ways to harness AI to improve advertising campaigns and better engage with users. These new tools are transforming the industry while also putting pressure on some advertising stalwarts.
The industry is also currently navigating a bumpy environment spurred by the trade war with China.
During the recent earnings season, many companies warned of sluggish advertising sales in certain regions due to a rocky macroeconomic environment. Recent developments, however, have suggested a cooling of tensions between the U.S. and China.
Last month, Reddit posted strong sales and upbeat guidance. The company has benefited from recent changes to Google search and internal site improvements, which include convincing logged-out users to open accounts. Logged-in accounts are more beneficial to advertisers.
WATCH: Outgoing WPP CEO says AI will ‘revolutionize’ advertising business
Helsing uses AI to analyze large amounts of sensor and weapons system data from the battlefield.
Pavlo Gonchar | Sopa Images | Lightrocket | Getty Images
European defense technology startup Helsing on Tuesday said that it’s raised 600 million euros ($693.6 million) in a bumper new round of funding.
The investment was led by Prima Materia, the venture capital firm founded by Spotify CEO Daniel Ek and by Shakil Khan, an early investor in the popular music streaming app. Ek is also chairman of Helsing.
Existing investors Lightspeed Venture Partners, Accel, Plural, General Catalyst and Saab also put money in, alongside new investors BDT & MSD Partners.
Defense and the technology behind it have become a hot area for investors lately, amid major global conflicts, including the Ukraine war to Israel-Gaza. Last week saw a further escalation of war in the Middle East as Israel launched a series of airstrikes against Iran.
In 2024, venture funding in Europe’s defense, security and resilience sector reached an all-time high of $5.2 billion, according to a recent report from the NATO Innovation Fund. The sector grew 30% in the past two years, outperforming the broader VC market, which saw a 45% decline over the same period.
Founded in 2021, Helsing sells software that uses artificial intelligence technology to analyze large amounts of sensor and weapons system data from the battlefield to inform military decisions in real time. Last year, the startup also began manufacturing its own line of military drones, called HX-2.
Helsing, which operates in the U.K., Germany and France, said it would use the fresh cash to invest in Europe’s “technological sovereignty” — which refers to attempts to onshore the development and production of critical technologies, such as AI.
“As Europe rapidly strengthens its defence capabilities in response to evolving geopolitical challenges, there is an urgent need for investments in advanced technologies that ensure its strategic autonomy and security readiness,” Ek said in a statement out Tuesday.
Helsing did not disclose its new valuation following the latest financing round, which is subject to “certain approvals,” according to a statement. The firm was previously valued at around 5 billion euros in a 450 million euro funding round led by General Catalyst last year.
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