Colossus 1 data center, Memphis, Tennessee

xAI's Colossus 1 data center stands on the site of a former Electrolux appliance factory in south Memphis, in Shelby County, Tennessee. The nearest neighborhood is Boxtown, about 2 miles away, in a part of the city whose cumulative cancer risk is already four times the national average.

To power the building before the grid could, xAI brought in gas turbines, and the Southern Environmental Law Center found in August 2024 that they were running with no air permit at all. Aerial imaging on April 9, 2025 found 35 turbines on site, and thermal imaging on April 24 showed more than 30 running at once. Hundreds of residents came to an April 25, 2025 public hearing on xAI's permit application. Alexis Humphreys, 27, who lives in Boxtown, asked: "How come I can't breathe at home and y'all get to breathe at home?" xAI said its operations complied with all applicable laws.

xAI removed the unpermitted turbines on June 17, 2025, after the law center sent a legal notice, and the Shelby County Health Department approved a permit for 15 on July 2. An appeal of that permit failed on December 15, 2025, when the Memphis and Shelby County Air Pollution Control Board dismissed it 6 to 1 as moot, with Yu Lin the only vote against. Twelve turbines fitted with selective catalytic reduction pollution controls remain in use at the site. "It allows large companies like data centers to install power plants without community input," said Amanda Garcia, a law center attorney. Bobby White of the Greater Memphis Chamber said the board had "applied existing law and policy."

Colossus is still cooled with fresh drinking water because the water recycling plant xAI promised Memphis has not been built. The Daily Memphian reported in April 2026 that the plant was on indefinite pause, leaving xAI and the Tennessee Valley Authority drawing on the Memphis Sand aquifer, which supplies the region's drinking water. Elon Musk has said xAI must build Colossus 2 before it builds the water recycling plant. SpaceX paused construction of the plant in April 2026, and the City of Memphis has said it is confident SpaceX will finish it.

The building is also getting busier: in May 2026 Anthropic announced a partnership tied to SpaceX that would add more than 300 megawatts of new capacity, over 220,000 Nvidia GPUs, at Colossus 1 within the month. xAI's larger Colossus 2 draws on turbines across the state line in Southaven, Mississippi, where the NAACP sued on April 14, 2026, alleging they too were running without an air permit.