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 general view of the Microsoft office building is seen in Cologne, Germany, on November 18, 2025.
Nurphoto | Nurphoto | Getty Images
Microsoft said Thursday that it will increase the prices of Office productivity software subscriptions for commercial and government clients on July 1.
The company’s Office applications, which include Word, Excel, PowerPoint and Outlook, have been facing increased competition in recent years from Google.
“We are continuously investing and innovating our platform for the future,” Nicole Herskowitz, corporate vice president for Microsoft 365 and Copilot, wrote in a blog post. “In the last year, we released more than 1,100 features across Microsoft 365, Security, Copilot, and SharePoint.” The new features have added value to the suites, she wrote.
Price hikes for commercial Office subscriptions have been infrequent. In 2022, Microsoft raised prices of its productivity bundles for the first time since launching the original Office 365 subscriptions in 2011. Microsoft changed the name of Office 365 to Microsoft 365 in 2020. In January, Microsoft announced a price hike for consumer Office bundles.
Microsoft offers Office 365 subscriptions for commercial use that include access to its productivity applications, along with higher-priced Microsoft 365 subscriptions that also include Windows operating system updates.
Here’s a breakdown of the commercial price changes:
- For small and medium-sized businesses, Microsoft 365 Business Basic will cost $7 per person per month, up from $6.
- Microsoft 365 Business Standard will be available for $14, up from $12.50.
- Microsoft 365 Business Premium will continue to cost $22.
- The entry-level Office 365 E1 offering for enterprises will still be sold for $10.
- Office 365 E3 will jump 13% to $26 from $23.
- The Microsoft 365 E3 package including Windows for enterprises will rise 8% to $39 from $36.
- The full-featured Microsoft 365 E5 will increase to $60 from $57.
- For front-line workers such as cashiers, Microsoft 365 F1 subscriptions will cost $3, up from $2.25.
- Microsoft 365 F3 will be available for $10, up from $8.
The U.S. Defense Department and other government clients will face similar percentage price increases.
The various subscriptions all exclude access to the $30 Microsoft 365 Copilot add-on that draws on generative artificial intelligence models. Some companies have started widely rolling out Copilot, while others have held off on expanding their deployments, CNBC reported last week.
In many cases, organizations receive discounts off of list prices, but Microsoft has cut back on direct volume deals for some types of customers.
Almost 43% of Microsoft’s $77.7 billion in fiscal first-quarter revenue came from its Productivity and Businesses Processes segment, which includes Office. In October, the company said revenue from Microsoft 365 commercial cloud services jumped 17%, while seats increased 6%, mainly from products targeting small and medium-sized businesses and front-line workers.
People walk next to the Google Cloud logo, during the 2025 Mobile World Congress (MWC) in Barcelona, Spain, March 4, 2025.
Albert Gea | Reuters
Google Cloud announced Thursday a multi-year partnership with artificial intelligence coding startup Replit, giving the search giant fresh firepower against the coding products of rivals, including Anthropic and Cursor.
Under the partnership, Replit will expand usage of Google Cloud services, add more of Google’s models onto its platform, and support AI coding use cases for enterprise customers.
Google will continue to be Replit’s primary cloud provider.
Replit, founded nearly a decade ago, is a leader in the fast-growing AI vibe-coding space.
In September, the startup closed a $250 million funding round that almost tripled its valuation to $3 billion, and said it grew annualized revenue from $2.8 million to $150 million in less than a year.
And new data from Ramp, a fintech company that also tracks enterprise spending on its platform, found that Replit had the fastest new customer growth among software vendors. Google, meanwhile, is adding new customers and spending faster than any other company on Ramp’s platform.
Put those together, and you get a clearer picture of why both companies see opportunity.
Vibe-coding emerged as a phenomenon earlier this year after AI models became more adept at generating code using only natural language prompts, allowing users with little experience in programming to use AI to create functioning code and potentially full applications.
Anthropic announced on Tuesday that its product Claude Code hit $1 billion in run-rate revenue. The coding startup Cursor, in November, closed a funding round that valued it at $29.3 billion, while also announcing it reached $1 billion in annualized revenue.
Replit, which bills itself as an easy-to-use product for non-developers, could help drive Google Cloud adoption among enterprises, and expand the reach of its AI efforts beyond traditional engineers.
Google is riding on the momentum of its new top-scoring model, Gemini 3. Shares of Alphabet have risen more than 12% since its debut.
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