His company faces proposed fines of more than $600 million per day per turbine.

Tesla CEO and world’s richest man Elon Musk has been dealing with a decline in the company’s stock price over the past few months. On April 10, 2025, President Trump bluntly stated: “I don’t need Elon at all, but I just like him. The guy’s done a fantastic job.” The storm hasn’t stopped there. He and xAI are now accused of installing 35 methane turbines at their Memphis, Tennessee facility, more than double the permitted amount.

According to images provided by the Virginia-based Southern Environmental Law Center (SELC), the facility that powers X’s AI chatbot Grok violated its permit by installing 20 additional ‘illegal’ generators.

Billionaire Musk has called the Tennessee data center “the world’s most powerful AI training cluster.” Musk’s company originally planned to support the Colossus supercomputer, which uses about 150 megawatts of power and 100,000 H100 GPUs, with even more to be added when it upgrades to 200,000. But by July 2024, xAI will need to add gas turbines to address the energy issue.

Concerns about toxic pollutants

The company initially applied for a permit to install only 15 gas-powered generators, which raised concerns from environmental groups and local residents. Not only would the excess capacity be illegal, it could also have long-term health impacts on the local community.

KeShaun Pearson, director of the advocacy group Memphis Communities Against Pollution, told the Shelby County Board of Commissioners that xAI was operating 35 methane-burning turbines, despite only having permits for 15, the Guardian reported.

xAI data center in Memphis. Photo: Interesting Engineering

“Poisoning our community with formaldehyde and nitrogen oxides from 35 dirty, unlicensed gas turbines shows a blatant disregard for the lives of the South Memphis community. Allowing these dangerous toxic pollutants to spread so rapidly is reckless, irresponsible, and threatens us all. The Shelby County Health Department must take decisive action and shut down xAI immediately,” Pearson noted.

The company is reportedly exploiting a legal loophole that allows the turbines to operate without a permit. In January 2025, xAI applied for approval for 15 turbines, but the remaining 20 were not included and still do not have official permits. Even so, they could continue operating for months while the company waits for local approval.

Turbines can power a city

SELC released images and data showing that the turbines could generate 420 megawatts, enough to power a city. Senior attorney Amanda Garcia said xAI had essentially set up an unregulated power plant in a residential area, which could pose serious health and environmental risks.

Illustration. Photo: Reuters

“Dozens of these gas turbines are causing significant harm to the air that Memphis residents breathe every day. We look forward to local health leaders taking swift action to hold xAI accountable for this clear violation of the Clean Air Act,” Garcia said in a statement.

In total, xAI’s 35 gas turbines have a combined generating capacity of 422 megawatts, roughly the same as the Tennessee Valley Authority’s Brownsville gas plant. But despite generating the equivalent of a power plant, the xAI data center operates without supervision, the organization added.

In a letter, the nonprofit also argued that generators are a major source of pollution, violating federal air quality standards and emitting dangerous carcinogens. The statement urged the local health department to immediately shut down operations and impose fines of $25,000 a day for generators operating without proper permits.

The surge in power consumption from AI-enabled data centers in the United States is driving increased fossil fuel use, while the energy industry is still struggling to meet this massive demand.