During its afternoon committee session, the Memphis City Council began ushering forward its plans for a temporary moratorium on data centers in the city.
The temporary moratorium ordinance passed on first reading on the council's consent agenda, after council members opted to move the ordinance to the 4 p.m. meeting agenda. The ordinance will need to go through three readings and approvals before it is formally adopted.
"No more stepping on us without talking to us," council member Jerri Green said during the afternoon committee session.
The initial approved ordinance is a temporary moratorium on acceptance, processing and approval of zoning and land
use permits associated with data centers within the City of Memphis. Construction permits, including special use or planned development, are approved and processed via the Memphis and Shelby County Division of Planning and Development.
"No City department, board, commission, agency, or official shall accept or approve such applications during the duration of this moratorium," the ordiance reads.
The current version of the ordinance outlines a 12-month ban. However, the ordinance will likely undergo amendments as it goes through its second and third readings.
3-month pause discussed
During the afternoon committee session, Council member Jeff Warren proposed a three month pause to not hinder development or business interest.
The potential ban comes after two years of relatively modest support from the majority of Memphis City Council members regarding SpaceXAI's expansion and development in Shelby County. Elon Musk's artificial intelligence company first began operations in Memphis in 2024 and has built the two largest hyperscale data centers in Shelby County: Colossus and Colossus 2.
The company also has plans for a third Shelby County data center at 5414 Tulane Road, near Colossus 2. (In total, four hyperscale data centers are in the works from SpaceXAI, including Macrohardrr at 2400 Stateline Road in Southaven.)
"We too were left in the dark," Green said regarding the plans for a third Shelby County data center from SpaceXAI. "We too learned in the newspaper."
Evaluating the impact
The Council's temporary ban is aimed at providing the city time to understand the infrastructure and environmental impacts of hyperscale data centers such as SpaceXAI's Colossus and Colossus 2.
Data centers are best described in three categories: hyperscale, enterprise and colocation. Hyperscale data centers are the largest such category and are associated with artificial intelligence, bitcoin and cloud computing. Enterprise data centers are service data centers used by individual companies, such as FedEx or St. Jude Children's Research Hospital, for research or business data collection. Colocation data centers are facilities where servers can be leased for individual use. Both enterprise and colocation data centers have been common in the U.S.; however, neither has the energy or infrastructure footprint associated with modern hyperscale data centers.
"The moratorium gives us time to ask specific questions," Council member J.B. Smiley Jr. said during afternoon committee meetings.
Residents show opposition
Dozens of residents came out to voice concerns over the ban and criticism for ongoing data center expansion. When the committee session approved moving the ordiance to the main council agenda, those in attendance clapped and cheered.
Memphis resident Raneem Imam said she came to support the moratorium after "feeling very voiceless" and having a residual sense of being "walked all over by businesses coming in."
"Memphis is not the city to be messed with," she said. She added SpaceXAI has made promises it hasn't followed through on.
The company had paused in early April construction on its proposed $80 million Colossus Water Recycling Plant as it prioritizes data center expansion. However, on June 23, Elon Musk posted to X, "Actually, I think we can probably resume working on the wastewater treatment plant in Q4."
Throughout both the committee and main council sessions, residents held up signs stating, "moratorium now" and "No more data centers."
"The community has been hurting for two years and no real meaningful conversations for two years," KeShaun Pearson said.
Pearson, who is the executive director of Memphis Community Against Pollution, has been critical of SpaceXAI operations in South Memphis since 2024 and has cited continued concerns with ongoing water usage and air pollution in the region caused by the company's Shelby County and DeSoto County data centers.
Several speakers during the public comment of the Aug. 18 meeting were critical of the lack of jobs and lack of transparency regarding both infrastructure and environmental impacts from SpaceXAI's hyperscale data centers.
Conversations began in July
The Memphis City Council's Planning and Zoning Committee began July 7 discussions for potential ordinance changes and updated regulations with the Memphis and Shelby County Division of Planning and Development. The council committee has not reconvened to discuss those changes further.
The Aug. 18 proposed moratorium is the first such action since that July meeting.
The changes come after two years of exponential growth from SpaceXAI and its data centers, which have been the catalyst for the council's decision and the public's criticism since June 2024, when SpaceXAI (then known as xAI) first announced plans for investment in Shelby County.
During the committee meeting, Smiley Jr. acknowledged the council has been slow to take action, which has been ultimately a hinderance and left residents vulnerable.
"Memphis should not wait until decisions have been made (for it)," Smiley Jr. said.
Second quarter call reveals massive gigs on the way
During its second-quarter earnings call, SpaceX, Musk announced plans for potentially adding 10 to 20 gigawatts of energy demand to SpaceXAI data centers by the end of 2027. For context, 10 gigawatts is equal to the peak summer demand of New York City — it is enough electricity to power over 15 million households.
Currently, the main power source for SpaceXAI has been a microgrid of gas turbines, solar and battery storage (via Tesla Megapacks). The company's power plant at 2875 Stanton Road is primarily using gas turbines (69 in total as of July 2026) to power operations at Colossus 2.
Chamber opposes ban
Since SpaceXAI has been operating in Memphis, the Greater Memphis Chamber has been an advocate for both the company and indirect investments due to SpaceXAI's presence in Memphis.
In an Aug. 18 statement, the Greater Memphis Chamber urged City Council members to vote against any temporary ban on data centers and stressed the importance of the city's "leverage" for the data center industry.
"Across the country, communities are closing their doors to data centers, often because they lack the power infrastructure, water capacity, or logistical footprint to support them. Memphis has all three. That reality is not a vulnerability. It is leverage, and it is leverage the Chamber intends to use on behalf of this community," the Greater Memphis Chamber said.
Neil Strebig is a journalist with The Commercial Appeal. He can be reached at neil.strebig@commercialappeal.com, 901-426-0679
Commercial Appeal Reporter Annie Goldman contributed to this story.
This article originally appeared on Memphis Commercial Appeal: Memphis council passes temporary data center moratorium on first reading
