Forbes reports:

Nearly six months ago in Memphis, before residents or even city councilors knew that Elon Musk was building “the world’s largest supercomputer” in their backyard, the billionaire’s team met secretly with a host of local and national law enforcement agencies including the sheriff’s office, Memphis Police Department, U.S. Department of Homeland Security and Federal Bureau of Investigations.

The covert meeting, which has not been previously reported, concerned Musk’s growing AI startup xAI, according to the Greater Memphis Chamber, an economic development group that had been steering the deal behind closed doors since March.

“I truly appreciate everyone’s time and commitment on this project. We are on the cusp of an amazing moment in Memphis history,” Chamber chief economic development officer Gwyn Fisher wrote to the group in an email. She offered them a tour of Musk’s new facility on one condition: that they sign non-disclosure agreements with an entity called CTC Property, a mysterious shell company controlled by Musk’s fixer and personal banker, Jared Birchall.

A former financial analyst, Birchall has been Musk’s right hand for nearly a decade. He became Musk’s wealth advisor several years after being fired from Merrill Lynch for improper correspondence with a client, Reuters reported. Since that time, he’s been named an executive at SpaceX, Neuralink, The Boring Company and xAI; manages Musk’s family office and foundation; oversaw the billionaire’s takeover of Twitter; and controls Musk’s expansive personal security detail.

Forbes was first to report that government officials in Memphis had signed NDAs with xAI, and subsequently obtained the agreement and other internal documents through a series of public records requests. That government agencies consented to xAI’s confidentiality terms is “unethical,” said Scott Banbury, conservation director of the Sierra Club Tennessee Chapter, who believes their primary accountability should be to the citizens of Memphis.

The FBI and Shelby County Sheriff’s Office declined to comment on the meeting with xAI, and the remaining law enforcement agencies did not respond to Forbes’ multiple outreach attempts. However, documents show that both the police department and sheriff’s office delivered signed NDAs to xAI’s corporate security chief Logan Beach. It’s unclear whether any of these agencies are providing protective services for the AI company. Musk has previously used unlicensed security guards to block public roads and beaches near SpaceX’s Texas launch site.

In the bones of an empty factory along the Mississippi River, xAI’s supercomputer came together in just four months. Nicknamed “Colossus,” as Forbes first revealed, the Chamber publicly announced in June that xAI would be making its “new home” in Memphis, boasting about the speed at which the “multibillion dollar” deal was closed. However, council members have said that was the first they’d heard about the project, and appealed for more time and information to understand the venture that stands to make xAI one of the largest power and water consumers in the city. One month later, the data center was officially online.

Musk’s companies have a long history of using NDAs to silence government officials about projects in their towns, and Memphis appears no different. xAI stands accused by city lawmakers of obscuring its dealings with developers and public officials who, for months, hashed out their plans for Memphis in private, Forbes previously reported. CTC Property first approached — and swiftly NDA’ed — the Chamber on behalf of xAI in March, but the city council and public wouldn’t learn about the project until June. “Under the NDA, we had to be really strictly adhered to that protocol and only people on a need-to-know basis were involved,” Chamber president Ted Townsend told Forbes in July. The Chamber declined to comment on the meeting it brokered for xAI and law enforcement. xAI did not respond to a comment request.

xAI’s push into Memphis has come with aggressive demands on area resources. The data center has requested enough power to run 100,000 households, and will draw more than 1 million gallons of water daily from the Memphis Aquifer for cooling its servers. Currently, it awaits approval from regional energy provider Tennessee Valley Authority (TVA) for a total capacity of 150 megawatts (MW), which will require the construction of an entirely new substation. Musk recently tweeted that the number of GPUs comprising the supercomputer will double “in a few months.” And Semafor reported that the facility has managed to run all 100,000 of its Nvidia H100 chips simultaneously.

The artificial intelligence frenzy has caused a spike in “hyperscale” data centers and, along with it, fears that local power grids and vital resources will be stretched to their limits. Yet, state privacy laws and NDAs have often allowed these projects to withhold key details from the public as trade secrets or confidential information. Google’s water usage data in The Dalles, Oregon, for example, was guarded by the city until The Oregonian sued for its release under public records law. When Forbes asked TVA about its other data center customers, the utility declined to share any information about them, claiming contractual agreements protected that “sensitive business information.” It would not say whether it had signed an NDA for the xAI project. Additionally, Memphis’ economic development agency, EDGE, denied Forbes’ request for public records relating to xAI by citing trade secrets. EDGE’s board members are appointed by the city and county, while the board of TVA, which is federally owned, is nominated by the U.S. president and confirmed by the Senate. [Continue reading…]

The Southern Environmental Law Center reports:

To meet the incredible energy demands, xAI is running methane gas turbines. The company has at least 18 of the turbines, with community members reporting that they have seen additional units at the site. These turbines pump out hazardous chemicals like formaldehyde and worsen ground level ozone, better known as smog. Even though the Tennessee Valley Authority recently approved xAI’s request for power, the company has not committed to turning off its gas turbines.

South Memphis’ predominantly Black communities are unfortunately no stranger to dirty air. The neighborhoods have long been targeted by industrial polluters, including a steel mill, a now-shuttered coal power plant, a utility-operated gas power plant, and an oil refinery. The result is a long legacy of environmental injustice, high asthma rates, and a failing grade for air quality from the American Lung Association.

Even worse, xAI is operating these harmful gas turbines without any permits. SELC and a coalition of community groups have warned the Shelby County Health Department that the company’s refusal to apply for a permit violates federal law. [Continue reading…]