Elon Musk’s xAI secures 150MW power approval amid concerns over US’s Tennessee Valley’s energy supply

In early November, the Tennessee Valley Authority (TVA) approved a significant power allocation for Elon Musk's xAI Colossus, granting the facility 150MW of power from the state’s grid. This marks a massive increase from the site's initial supply of 8MW, raising concerns among local stakeholders regarding the potential impacts on power reliability and costs throughout the Tennessee Valley. Reports indicate that Musk plans to further expand the computing capacity at the facility, which could double its energy requirements.

xAI, Musk's artificial intelligence company, has worked quickly to set up its supercomputer, completing the installation in just 19 days — a feat that contrasts sharply with the typical four-year setup time, as noted by Nvidia CEO Jensen Huang. However, when the facility opened in July, it only had access to 8MW of power. To meet its needs, Musk had to rely on portable power generators. Memphis Light, Gas & Water (MLGW) later upgraded the substation to 50MW over the summer, but even with this increase, it was insufficient to power all 100,000 GPUs running at full capacity.

Experts estimate that 155MW would be required to operate the entire supercomputer, meaning Musk’s request for 150MW is a relatively conservative estimate. Despite this, there are concerns about the strain such high-power demands might place on the local grid. Amanda Garcia, senior attorney at the Southern Environmental Law Center, expressed alarm over the TVA’s approval, arguing that the decision was made without considering the broader impact on local communities and energy costs. She pointed out the TVA's previous concerns about power reliability and its proposal for a new gas plant in South Memphis.

However, MLGW, the local power distribution company, has reassured the Memphis City Council that the additional 150MW should not disrupt grid stability or affect service reliability for local residents. Doug McGowen, CEO of MLGW, emphasized that the new power request falls within the utility’s peak load forecast and that the TVA could supply more power if needed.

As AI data centers like xAI continue to scale, experts warn that massive energy demands will strain local power infrastructure unless substantial upgrades are made. Companies such as Amazon, Google, Microsoft, and Oracle are already exploring nuclear power solutions to meet future needs, but these projects are still years away from fruition. For now, data centers will have to rely on the existing power grid, while cities and utilities will face the challenge of balancing the needs of industrial clients with those of local consumers.