Memphis Mayor, Utility Head Push xAI to Complete Water Recycling Facility

The $80 million project was meant to use recycled water to cool servers at xAI's data centers.

Apr. 10, 2026 at 5:08pm

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A highly detailed, glowing 3D illustration of a futuristic water treatment facility, with neon cyan and magenta lights illuminating the complex pipes, tanks, and filtration systems, set against a dark, moody background to convey the importance of sustainable water management for data centers.As Memphis pushes xAI to complete its promised water recycling plant, a conceptual rendering highlights the high-tech infrastructure needed to protect the city's precious water resources.Memphis Today

The mayor of Memphis and the head of the city's public utility, Memphis Light, Gas & Water (MLGW), say they will pressure xAI, the artificial intelligence company founded by Elon Musk, to finish building a promised $80 million wastewater recycling facility that is now apparently on hold. The facility was meant to use recycled water from a nearby treatment plant to cool the servers at xAI's massive data centers in Memphis, rather than drawing from the area's drinking water aquifer.

Why it matters

The water recycling facility was seen as an important project to protect Memphis' limited water resources as xAI expands its data center operations in the region. The mayor and MLGW president have emphasized that promises made to the community are not optional, and they will continue to advocate for the project's completion.

The details

xAI, Elon Musk's artificial intelligence company, had announced plans for the $80 million wastewater recycling facility last year. The facility was meant to use recycled water from a nearby treatment plant to cool the servers at xAI's data centers in Memphis, rather than drawing from the area's drinking water aquifer. However, Elon Musk said on Thursday that xAI has decided to complete its Colossus 2 data center first, putting the water recycling project on hold. xAI has stated it remains committed to finishing the water recycling facility, but Memphis officials say they will continue to press the company to deliver on its promise.

  • In 2024, xAI announced plans for its first data center in Memphis.
  • Later in 2024, xAI completed its first Colossus supercomputer facility in southwest Memphis.
  • In 2025, xAI announced plans for the $80 million wastewater recycling facility.

The players

Paul Young

The mayor of Memphis who has stated he will continue pressing xAI to deliver on its promise to build the wastewater recycling facility.

Doug McGowen

The president and CEO of Memphis Light, Gas & Water (MLGW), the city's public utility, who says he will continue to advocate for the water recycling project.

Elon Musk

The head of xAI, the artificial intelligence company that has built or is building data centers in the Memphis area.

xAI Memphis

The local division of Elon Musk's artificial intelligence company that has committed to building the water recycling facility, though it is currently prioritizing other projects.

Tennessee Valley Authority (TVA)

The regional public power provider that has worked with the city and MLGW to support xAI's data center expansion in the Memphis area.

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What they’re saying

“Promises to this community are not optional. A wastewater facility is about protecting our water and our future. I will continue pressing xAI to deliver.”

— Paul Young, Mayor of Memphis

“xAI is committed to building a state-of-the-art water recycling plant in Memphis. This plant will protect billions of gallons of water each year. The team is currently prioritizing other, more immediate projects at the site, but our plans to build the water plant have not changed.”

— xAI Memphis

“I am disappointed to have learned through the media that this project is on hold. I understand that any large project can encounter hurdles. It is imperative for our community that the obstacles are overcome and the project restarted.”

— Doug McGowen, President and CEO, Memphis Light, Gas & Water

What’s next

The mayor and MLGW president say they will continue to advocate for the water recycling facility project and press xAI to follow through on its commitment to the community.

The takeaway

This situation highlights the importance of holding large tech companies accountable to their promises, especially when it comes to protecting critical local resources like water. Memphis officials are determined to ensure xAI fulfills its obligation to the community, demonstrating the power of local leadership in shaping the impact of tech expansion.