Memphis councilors reject 18-month data center moratorium

Instead, they ban new projects for 135 days

Proposals for a data center moratorium of up to 18 months in Memphis, Tennessee, have been rejected by councilors.

At a meeting on Tuesday, members of Memphis City Council instead voted for a 135-day pause on new data center applications, to coincide with a 90-day review into the impact of digital infrastructure projects in the city, which was commissioned by Paul Young, mayor of Memphis, at the start of October.

The 18-month moratorium plan has been under the microscope for some weeks, and DCD reported earlier this month that lawmakers had postponed a vote on the proposal, put forward by councilor JB Smiley Jr., following a controversial meeting attended by more than 100 members of the public, most of whom opposed data centers. This meeting, on October 6, reportedly ended in protests and fights outside the council chamber.

In a vote on the moratorium, which came after a five and a half hour debate, councilors were split 6-6 on whether to enact the data center ban, with one member absent. Instead, they voted for an alternative that will ban data center projects for a much shorter period, pending the outcome of Mayor Young’s review, which it is hoped will “develop clear, actionable recommendations for regulating large and hyperscale data centers in Memphis.”

Hundreds of residents attended this week’s meeting, according to local outlet Action News 5, with 407 able to fit into the council chamber, and dozens of others watching proceedings on screens outside. This number included six people initially banned by the council for violating its speech and decorum policy at the October 6 meeting. However, the ban was lifted by a judge this week, who said the council’s actions were unreasonable.

Memphis does not have a big data center market, but is home to several facilities operated by Elon Musk’s xAI, now rebranded as SpaceXAI, or SpaceXSI.

Developed over the last two years, the data centers, which power the company’s Grok chatbot as well as offering cloud services to clients including generative AI company Anthropic, have been the subject of multiple lawsuits, with environmental and civil rights campaigners claiming xAI has violated its permits when it comes to the 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 said a moratorium would be harmful to 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.

Data center moratoriums have become commonplace in communities across the US as backlash against AI and data centers grows, with some bans even being introduced at the state level.

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