TVA says no contract in place yet for Elon Musk's xAI project in Memphis

When xAI announced it was building the world's largest supercomputer in Memphis , it was always an ambitious project — plans to open it before the end of the year made it even more so.

While work continues on the project at the former Electrolux site, Elon Musk's artificial intelligence company still lacks a key approval before it can become fully operational.

Due to the site's power usage, it requires approvals from Memphis Light, Gas and Water (MLGW) and Tennessee Valley Authority (TVA).

TVA spokesperson Scott Brooks said because the facility will use more than 100 megawatts, it will require TVA approval to connect to the grid. Currently, TVA does not have a contract with xAI.

"We are still working with xAI on the details of their proposal and electricity demand needs. We do not have a signed agreement with them at this time," Brooks said in an email Tuesday.

Brooks added that contractual agreements do not have a specific timeframe on when they may be completed, each is subjective given the location and the business (consumer).

MLGW has estimated that the site will add 150 megawatts of electricity demand to the MLGW grid and will require about 1.3 million gallons of water daily . The Commercial Appeal asked MLGW if the utility company has received any communication from xAI regarding its opening timeline given its power usage. MLGW representatives deferred comment to xAI.

Since the project's announcement on June 5 , xAI has yet to respond to any requests for comment from The Commercial Appeal regarding the project. No specific capital investment or employment figures for the xAI project have been made public either.

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On July 2, xAI made an announcement on the Musk-owned social media site X (formerly known as Twitter) for several job openings on the company's career portal including nine jobs in Memphis and 27 total.

Those nine Memphis jobs include positions for a fiber foreman and fiber technician along with project manager, security and technician roles. Based on the descriptions for the fiber tech and foreman roles, the xAI facility will install a fiber network for its broadband usage. Of the nine jobs, only three had salary ranges posted including the protective intelligence lead, security operations lead and security tech lead roles. Those roles had salary ranges from $90,000 to $150,000.

Construction work has been underway at the former Electrolux site at 3231 Paul R. Lowry Road, south of President's Island . The 785,000-square-foot facility is the new home for xAI. In April, Ohio-based Darana Hybrid filed a construction permit with the Memphis and Shelby County Division of Planning and Development for alterations to the mechanical and electrical systems at the Paul R. Lowry Road property. The estimated cost of construction for those changes is $10,267,329, according to the permit application. Milwaukee-based Phoenix Investors purchased the former Electrolux site in December 2023 .

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When the deal was announced in June, Greater Memphis Chamber President Ted Townsend said the xAI facility would open this year. Townsend also expected xAI to bring a tax incentive proposal to help with construction costs to the Economic Development Growth Engine for Memphis and Shelby County (EDGE).

On June 21, EDGE Vice President of Operations Joann Massey confirmed that the EDGE board had not received any proposals from xAI representatives , meaning the xAI supercomputer project would be privately funded.

The project is expected to use somewhere near 100,000 H100 Nvidia semiconductor chips (the exact number has yet to be confirmed by xAI.) University of Memphis professor and artificial intelligence researcher Santosh Kumar said those Nvidia graphic processing units (GPU) are the fastest on the market. Kumar also made the comparison that one of those GPU chips is equivalent to adding one household to the electrical grid in terms of power usage — making it ultimately comparable to adding 100,000 households to Memphis' power grid .

While no confirmation has been made on further expansions for the xAI facility or other Musk-affiliated companies expanding within the region, the Greater Memphis Chamber has remained optimistic on the location of the xAI facility and potential for growth .

Neil Strebig is a journalist with The Commercial Appeal. He can be reached at neil.strebig@commercialappeal.com , 901-426-0679 or via X/Twitter, @neilStrebig .

This article originally appeared on Memphis Commercial Appeal: TVA says no contract in place yet for Elon Musk's xAI project in Memphis