Elon Musk’s plan to build Boring Co. tunnels in Nashville sparks partisan feud
Elon Musk has expanded a number of his companies within Texas, including Tesla, SpaceX, the Boring Co. and Neuralink. Tesla broke ground on a lithium refinery in Texas earlier this year with Governor Greg Abbott in attendance.
Christophe Gateau | Picture Alliance | Getty Images
Elon Musk’s tunneling venture, The Boring Company, announced plans earlier this week to build a 10-mile underground loop in Nashville, in coordination with Tennessee Republican Governor Bill Lee, who put out a press release praising the project.
Democratic lawmakers in Nashville are demanding answers on the plans, while the state’s Republican leaders have jumped at the chance to partner with Musk. A state commission is holding an emergency meeting and public hearing Thursday morning to discuss a “no cost/mutual benefit” lease arrangement that’s been proposed to help the company get the tunnels started.
“We are aware of the state’s conversations with the Boring Company, and we have a number of operational questions to understand the potential impacts on Metro and Nashvillians,” Freddie O’Connell, Nashville’s mayor, said in an e-mailed statement.
Based in Pflugerville, Texas, The Boring Co. is poised to take over a chunk of public property about the size of a football field in downtown Nashville. The commission that’s meeting on Thursday includes Tennessee’s governor, speaker of the house, speaker of the senate and secretary of state. Members of the public were invited to give testimony but with less than a week’s notice.
On Monday, The Boring Co. and state officials divulged that Musk’s venture would dig its tunnels under state-owned roadways in order to “connect downtown and the Convention Center to Nashville International Airport with a transit time of approximately 8 minutes.”
It’s called the Music City Loop, and the project marks Musk’s latest effort to bolster his budding business empire in Tennessee. His artificial intelligence startup xAI, the parent of social media platform X, is building data centers and a power plant in Memphis, on the western side of the state.
The governor’s office said on Monday that the Nashville project would come “at zero cost to taxpayers” and would be “entirely privately funded,” though no details were provided about whether or what type of cost-benefit analysis, environment, safety or traffic assessment had been completed by the state before agreeing to the deal.
Musk became a major force in Republican politics last year, when he spent almost $300 million to help reelect President Donald Trump before working for the Trump administration in the first few months of this year. Musk brought The Boring Co. CEO Steve Davis with him to lead Trump’s DOGE initiative, slashing federal agencies, regulations and personnel.
Justin Jones, a Democratic state representative in Nashville, told CNBC on Wednesday that his district had not been able to participate in any public comment period, and hadn’t seen any environmental impact report or health assessment related to the Music City Loop or its construction.
‘Not allowed to be here’
On Wednesday evening, The Boring Co. held a recruiting event, with Davis in attendance, at the parking lot where the company expects the state to grant it a no-cost lease. Jones went to the event hoping to discuss the jobs that Musk’s company is looking to create in his district, the lawmaker told CNBC.
“The CEO is here and the other members of their team, but they sent someone out to tell me that I’m not allowed to be here,” Jones said in a text message, sharing a video of his interaction with The Boring Co. employees at the event.
On Monday, Jones arrived to a separate company event at the Nashville airport only to have authorities claim he lacked proper credentials to attend.
Jones told CNBC that state officials explained to him that only state-level authorizations would be required for The Boring Co. project to begin because the tunnels would go under state roads, and would not require the use of taxpayer funds.
“We’re not even being informed where or what exactly these tunnels are going to run through,” Jones said. “Tomorrow they’re voting to give away state land for no cost. But giving away land obviously has a cost.”
The governor’s office didn’t respond to a request for comment regarding Jones’ concerns. Representatives for The Boring Co. weren’t immediately available to comment.
The Boring Co. has previously built tunnels in Las Vegas, including an initial two miles to carry visitors to different exhibit halls around the Las Vegas Convention Center. Tesla drivers travel through the tunnels to pick up and drop off passengers, who book their rides using an app.
The initial loop cost Nevada taxpayers about $50 million and has been criticized for a lack of pedestrian entrances, walkways and platforms, and its limitations relative to a subway system. The Boring Co. was previously fined by the Nevada Occupational Safety and Health Administration for repeated violations and worker injuries in Las Vegas.
The Musk-owned company also abandoned plans to build tunnels in other locations, including Chicago.
One particular concern in Nashville is that the city is prone to flooding with an average annual rainfall of around 50 inches, according to the National Weather Service, which compares to around 4 inches in Las Vegas. The city’s Metro Water Services previously arranged, with federal support, to purchase homes from residents in vulnerable areas at reduced prices, and convert the land there to green spaces.
The Boring Co. has no experience building in areas with that kind of rainfall and flooding concern.
The public hearing to discuss whether the state will give the parking lots to The Boring Co. in a no-cost, mutual benefit lease agreement starts at 8 a.m. local time on Thursday at Cordell Hull State Office Building, according to a copy of the agenda on the state government’s website.
In Memphis, xAI has faced a community backlash over its use of natural gas-burning turbines which power its data center and supercomputer there. The facility, housed in a former home appliance factory, is responsible for training xAI’s controversial chatbot Grok.
The NAACP and other environmental and public health advocates are suing xAI, saying the company exacerbated air pollution in the area, harmed majority-Black communities who live near their facilities, and violated the Clean Air Act. An xAI spokesperson said at the time the groups announced their intent to sue that the company takes “our commitment to the community and environment seriously.”
WATCH: Tesla CEO Elon Musk says he has no plans to merge the automaker with xAI
A Dell Technologies sign is seen in Round Rock, Texas, on June 2, 2023.
Brandon Bell | Getty Images
Despite beating on its top and bottom lines, shares of Dell Technologies fell more than 5% Thursday in extended trading after giving third-quarter earnings per share guidance that below Wall Street’s expectations.
Here’s how the systems integrator did versus LSEG consensus estimates:
- EPS: $2.32, adjusted vs. $2.30 estimated
- Revenue: $29.78 billion vs. $29.17 billion estimated
Dell raised its full year outlook for revenue to be $107 billion at its midpoint and diluted earnings per share to $9.55 at the midpoint, topping Wall Street estimates of $104.6 billion and $9.38 per share.
However, Dell’s guidance for third-quarter earnings per share of $2.45 came in short versus LSEG’s mark of $2.55, despite Dell’s guide for $27 billion in third-quarter revenue topping estimates of $26.1 billion.
Dell said that part of the reason its profit forecast is concentrated in the fourth quarter is due to seasonality, particularly in its storage business.
For the second quarter, overall revenue rose 19% on an annual basis. That was driven by the company’s Servers and Networking revenue, including AI servers, which came in at $12.9 billion, which was up 69% on an annual basis.
Dell is one of Nvidia’s key customers. Dell buys chips from the AI leader and builds computers around them, which it sells to end-users such as CoreWeave, a cloud service. Dell said it shipped $10 billion in AI servers in its past two quarters.
Dell said that it now plans to ship $20 billion of artificial intelligence servers in its fiscal 2026, double what it sold last year.
However, the company’s storage revenue declined 3% to $3.86 billion and missed a StreetAccount estimate of $4.1 billion in sales.
Revenue in the company’s client solutions group, which includes PC sales to enterprises, rose 1% on an annual basis to $12.5 billion. While it used to be Dell’s largest business group, in recent quarters it has grown much slowly than the company’s data center business.
Dell said it spent $1.3 billion on share repurchases and dividends during the quarter.
WATCH: Nvidia’s data center opportunity is still enormous and it’s early, says Bernstein’s Stacy Rasgon
Technology
Intel gets $5.7 billion from Trump deal as White House says details are ‘being ironed out’
Intel CFO David Zinser said that the semiconductor giant received $5.7 billion from the U.S. government on Wednesday evening.
Zinsner acknowledged the investment on Thursday during an investor conference. The investment is part of the White House’s decision last Friday to take a 10% stake in the beleaguered computer chip company.
Zinser also signaled the possibility that Intel seeks outside investment for its foundry business.
The company reported better-than-expected second-quarter results on July 25, but its shares sank 8% due to concerns over the business of its foundry unit, which manufactures computer chips for other firms.
“There’s likely going to be some opportunity for outside investors in foundry, and that will probably be our second opportunity to raise cash to fund the growth on the foundry side,” Zinser said.
White House press secretary Karoline Leavitt said Thursday that the Intel deal is still “being ironed out by the Department of Commerce.”
“The T’s are still being crossed, the I’s are still being dotted,” Leavitt said. “It’s very much still under discussion.”
Intel released a corporate filing on Monday in which it warned that the deal with the U.S. government could generate “adverse reactions” from investors, employees and others.
“There could be adverse reactions, immediately or over time, from investors, employees, customers, suppliers, other business or commercial partners, foreign governments or competitors,” the filing said. “There may also be litigation related to the transaction or otherwise and increased public or political scrutiny with respect to the Company.”
WATCH: Intel CFO: Received $5.7 billion in cash from U.S. government last night.
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