The Memphis council delayed a decision on a year-long data center moratorium despite protests, and the city is home to xAI's data centers, where the moratorium could ban new developments for 12 months.
Lawmakers in Memphis have postponed a vote on a temporary data center moratorium for a second time, despite residents packing a council meeting to call for restrictions.
The Memphis City Council has been debating a 12-month pause on new data centers so that it can assess the social, health, and environmental impact of digital infrastructure projects in the area.
At a meeting last week, members voted 7-5 to postpone a decision on whether to introduce the moratorium, which was proposed by councilor JB Smiley Jr. A vote is now likely on October 20, to allow time for further debate.
Last week's meeting was interrupted by angry protests. More than 100 residents attended, mainly to voice their opposition to data centers. Fox News Memphis reported that protesters chanted "this is our city" and "show me what democracy looks like" as police officers cleared the council chamber. There was also reportedly a fight outside the council offices, though police said no arrests were made.
It is the second time councilors have delayed a decision on whether to introduce the moratorium. Similar measures are being proposed in communities across the US as backlash against AI and data centers grows, with some moratoriums even being introduced at the state level.
Memphis does not have a large data center market, but it is home to several facilities operated by Elon Musk's xAI, now rebranded as SpaceXAI. Developed over the last two years, the data centers power the company's Grok chatbot and offer cloud services to clients including generative AI company Anthropic. They have been the subject of multiple lawsuits, with environmental and civil rights campaigners claiming xAI has violated its permits over its use of gas turbines, which have helped the company bring its data center online quickly.
While opposition to the data centers in Memphis is considerable, some councilors say a moratorium would harm economic development in the area, as data center companies could take their tax dollars to other areas. One of Musk's data centers is already located across the state border in Mississippi, so future developments at that site would not be affected by a moratorium in Memphis itself.
Speaking to WREG, councilor Jeff Warren said: "If we pass a moratorium, there's no reason for them to think they need to come here. They get the same benefit from going to DeSoto County, Crittenden County, Fayette County, Tipton County."