The Memphis City Council meeting on Tuesday had already been going on for more than four hours by the time Doug McGowen, the CEO of the city’s public utility, sat down to present. The councilmembers had just received a grim update on the city’s declining annual murder rates, but were rather attentive as McGowen turned the conversation to xAI.
It was last summer when Elon Musk made a surprising foray into my hometown—Memphis, Tenn.—with plans to build a supercomputer. In a matter of months, xAI had set up a computer with 100,000 GPUs in an enormous factory in an industrial district near the Mississippi River—all to train its proprietary large language model, Grok. Tesla megapacks were shipped in, and generators were set up to power the center so it could operate as xAI tried to get on the city’s grid.
But getting onto the city’s grid is easier said than done, as McGowen shared in this week’s City Council meeting. Companies have to file individual requests with the Memphis utility, MLGW, which will then have to turn around and study all potential impacts to the local, regional, and national power grid before it offers a path to move forward. After all, power outages are a huge risk.
McGowen disclosed in the meeting that the utility is still working on xAI’s first request for 150 megawatts of power, which has required them to schedule construction for a substation (paid for by xAI) and run a transmission line out to the facility. xAI’s subsequent 150 megawatt power request is still under initial review, and McGowan said in the meeting that it was “uncertain at this time…when or if that load will come online.”
But the big wrinkle, as I wrote about yesterday, is whether Memphis’ power infrastructure is capable of supporting the additional computing power that xAI says is coming soon. In December, the company declared at a city Chamber luncheon that its “Colossus” supercomputer would have some 1 million GPUs. That’s a massive expansion, and, as McGowen disclosed at this week’s meeting, xAI hasn’t shared any details of what an expansion of that magnitude would require power-wise. McGowen was clear to lay out that there are limitations to what Memphis’ transmission lines can handle without building new infrastructure.
“It is a physics problem, not a political problem, about how much energy can be provided here,” McGowen said.
All this points to a bigger, underlying problem that’s starting to surface as companies like xAI and OpenAI (which have raised billions of dollars from investors), along with Amazon, Microsoft, Meta, and Nvidia, build enormous AI data centers in cities across America to power their AI services. These AI data centers require massive amounts of electricity. In a report published last year, Goldman Sachs projected that the power demand from data centers would more than double by 2030. It’s an open question whether our power grids are even capable of handling this kind of compute power guzzling—and what it will mean for clean energy efforts.
It’s early, but there has been some data suggesting there has already been an impact on regional power grids. At the end of December, Bloomberg published an initial analysis that showed that AI data centers may be distorting the flow of electricity to millions of people—in both cities and rural areas.
And it’s clearly something many of these cities are thinking about as new data centers come online. “Our responsibility is to ensure that, number one, we do nothing to interrupt the bulk electric system or put any risk on that—because that's the driver for the entire country,” McGowen said.
I’m spending a lot of time thinking about this these days, so if you have any thoughts or perspective on it, please reach out.
Just a note…Many readers, including Term Sheet’s Allie Garfinkle, have been impacted in some way by the wildfires in Los Angeles. I’m thinking about all of you right now, and please do what you can to stay safe.
See you tomorrow,
Jessica Mathews
X: @jessicakmathews
Email: jessica.mathews@fortune.com
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