In December, a big announcement was made in Memphis that grabbed everyone’s attention. One of xAI’s executives, Elon Musk’s artificial intelligence company, revealed plans to massively expand its supercomputer facility, Colossus, which trains its AI model, Grok. The idea? A new facility so powerful it would house a whopping 1 million Graphics Processing Units (GPUs)—an increase of 900% compared to the current 100,000 GPUs at the existing Memphis location.
Sounds impressive, right? But there’s one major issue that could stand in the way of these big plans: Does Memphis even have the power to make it happen?
At a Memphis City Council meeting on Tuesday, Doug McGowan, the CEO of Memphis’ utility company, gave a reality check. He explained that building such a massive facility might be impossible without serious upgrades to the local power infrastructure.
While McGowan appreciates the excitement surrounding new opportunities, he was quick to point out that “there are pragmatic realities” to consider. He stressed, “This is a physics problem, not a political one,” meaning the issue isn’t about policies or decisions—it’s about whether the power grid can actually handle the load.
The challenge isn’t just about how much power xAI needs right now; it’s also about how much power can safely be delivered through existing power lines. McGowan noted that the utility company is legally obligated to review every request for power to avoid disrupting service, either locally or even across the country.
But here’s the kicker: xAI’s first facility isn’t even fully online yet. They’ve been using temporary generators while MGLW, the utility company, works to meet the initial power demand. xAI has already paid for the construction of a new power substation to support the first 150 megawatts of power. There’s also a second power request in review, but McGowan made it clear that it’s still uncertain when or if that extra power will actually come through.
Even before securing all the power it needs for its first facility, xAI is already talking about a massive expansion to Colossus. If it goes ahead, this expansion could more than triple the amount of power required. But McGowan says xAI hasn’t provided any formal details about the expansion, including where it will be or exactly what it will involve. “They’re not ready for us to study it, and we’re not ready to study it,” he said.
It’s a big deal because the rise of AI and the demand for computing power is putting strain on power grids across the country. Generative AI, like Grok, requires huge amounts of energy, and some worry it could slow down efforts to reduce carbon emissions. The power for Memphis comes from the Tennessee Valley Authority, which mixes coal, gas, hydroelectric, nuclear, and solar energy. Although TVA says 60% of the power it supplies is carbon-free, there’s still the concern of whether the grid can keep up with growing demands.
McGowan emphasized that while MGLW is proud of its progress with xAI’s first phase, Memphis’ utility system has limits. “We’re dealing with the physical realities of what our utility system can provide,” he said.
So, while the tech world is buzzing about xAI’s ambitious goals, Memphis is facing a tough question: Will the city’s infrastructure be able to keep up with Musk’s mega plans? Stay tuned.
