The reporting was supported by a grant from the Pulitzer Center.
MEMPHIS, TN — More than three decades after serving in Operation Desert Storm, Loretta Young Thornton never expected the sounds of war to follow her home.
Thornton, 66, spent nearly 25 years in the Tennessee Army National Guard, serving as a military police officer before retiring as a decorated sergeant in 2004. She also built a career with the U.S. Postal Service.
After a lifetime of work, she poured her savings into a modest, four-bedroom home built in the 1920s on a secluded two-acre lot in Memphis, near the Mississippi state line.
She named it Serenity.
When Thornton bought the house in 2014, the surrounding woods were home to deer, squirrels, hawks and wild turkeys. At night,
she listened to the calls of owls, including one she affectionately called her boyfriend.
Then the trees came down, sending clouds of dust swirling toward Thornton's home.
In their place rose Colossus 2, a massive data center built for billionaire Elon Musk's artificial intelligence company, xAI. The sprawling complex, designed to house thousands of powerful computer chips to train the next generation of AI models, sits just across the railroad tracks from Thornton's property.
Now, the sounds of nature have been replaced by the drone of industrial machinery, a mechanical roar resembling a jet engine that Thornton said runs day and night.
The squirrels have disappeared. The owls have largely fallen silent.
The relentless noise sometimes triggers troubling memories of her military service, forcing Thornton to remind herself that she's no longer in a war zone.
“When I come out here, or when I go to bed at night, I train my thoughts,” she said. “You OK? You at home? Ain't no bomb gonna drop on you. You know you ain't in the desert no more.”
She tries to tune out the noise by working in her yard and renovating her back deck. Humor helps, too.
“I just say that's my noisy neighbor, Elon Musk,” she said.
Billions on the line
Thornton is living on the front lines of a data center boom sweeping Tennessee and the nation, as technology companies race to build the infrastructure powering artificial intelligence.
The Tennessee Valley Authority is planning more than $13 billion in power system investments through 2029. Its long-range forecasts project a need for 11,000 to 32,000 megawatts of additional generating capacity by 2040. Even at the low end, that would expand TVA’s existing power system by roughly one-third. At the high end, it would nearly double its size.
Much of the pressure is coming from electricity-hungry industries like data centers. They already account for 18% of TVA's industrial electricity demand, a share expected to double by 2030, according to the utility's estimates. Industrial customers account for about 60% of the utility's total electricity demand.
But as TVA prepares for one of the largest power expansions in its history, the public doesn't know how much of that projected growth is tied to data centers.
Last year, TVA reported roughly 11,000 megawatts of electricity requests from data centers and technology companies alone, nearly a third of its existing generating capacity. That's enough power to supply roughly 6.4 million average homes, according to TVA's estimates. It's just over double the total number of households in Tennessee.
TVA now calls that figure outdated and has declined to provide an updated estimate or disclose how much data center demand is included in its power forecasts.
Spokesman Scott Brooks described the earlier figure as a "moment in time" that was "likely outdated as soon as it was shared."
Meanwhile, economists warn of a possible AI investment bubble. If the boom goes bust, who pays for billions in power infrastructure built to serve demand that never materializes?
TVA says new charges on data centers will help protect customers. But environmental advocates question whether those safeguards go far enough.
“If they are not getting revenues to cover these costs from the data centers, they will get them from the rest of us,” said Maggie Shober, research director of the Southern Alliance for Clean Energy.
The boom meets resistance
From Nashville to Memphis, communities across Tennessee are fighting back against the data center boom.
Hundreds protested a proposed facility near the Nashville Zoo this year, while in rural Lawrenceburg, residents packed a planning commission meeting to oppose another project. In Memphis, a debate over a proposed moratorium erupted into chaotic protests that shut down a city council meeting.
The battles are unfolding amid a nationwide building frenzy. The United States already has more than 4,000 data centers, according to industry database Data Center Map. Those facilities consumed more than 4% of the nation's electricity in 2024, according to the International Energy Agency, which projects demand will more than double by 2030. A Pew Research Center analysis found that much of the planned construction is headed to rural America.
These facilities are essentially giant warehouses packed with computer servers. The largest operate thousands of powerful chips around the clock, requiring enormous amounts of electricity and cooling.
Data centers have been around for decades, but the artificial intelligence boom is ushering in a new generation of sprawling, power-hungry campuses that dwarf many of their predecessors.
Tennessee has about 65 data centers of varying sizes, including major campuses operated by xAI in Memphis, Meta in Gallatin and Google in Clarksville, according to Data Center Map.
More massive projects are being proposed. They include a $659 million expansion of xAI's Colossus 2 campus in Memphis and an $11.3 billion, 850-acre development in Bradley County outside Chattanooga known as Project River, which proposes generating up to 1,500 megawatts of its own electricity to power a hyperscale data center.
A quick vote on a costly question
As TVA moves ahead with new power generation, its board gathered in Memphis in August to approve protections intended to keep data center costs from falling on ordinary customers.
The decision took just minutes.
Meeting at the Halloran Centre on Aug. 20, board members unanimously approved with no discussion or debate a new electricity rate charging data centers about 10% more than TVA's manufacturing rate.
Officials said the utility has 4,120 megawatts of new generating capacity under construction and another 3,000 megawatts under evaluation. But TVA says it is not building specifically for data centers.
"TVA is not focused on building to meet data center growth," Brooks told The Tennessean. "We are focused on building new generation to support growth in business and industry and to preserve delivery of reliable, affordable electricity to 10 million people we serve."
Under the new rate, which took effect Oct. 1, new and expanding data centers subject to the charge face a nonrefundable capacity commitment fee of approximately $1.5 million per megawatt, payable over three to five years. The charge is intended to recover costs associated with additional power generation needed to serve their demand. TVA can also require data centers to temporarily reduce or interrupt their electricity use.
TVA says the measures protect households and other businesses from subsidizing data center growth.
But environmental advocates say TVA has not provided enough information to determine whether those protections would cover its long-term investments if data centers close early or use less electricity than expected.
Shober with the Southern Alliance for Clean Energy said other major utilities, including Duke Energy and Georgia Power, have disclosed more information about their efforts to protect customers. Those measures include minimum electricity payments and penalties if data centers terminate their contracts early, though Shober said the protections have not always been sufficient.
Shober said TVA's capacity commitment fee could offer stronger safeguards.
"For TVA, this capacity commitment charge in particular indicates it could protect customers," Shober said. "We just don't have enough information to say that with any certainty."
TVA says it based its new data center rates on annual cost-of-service studies, but has not released the calculations showing how it arrived at the roughly 10% rate increase or the $1.5 million-per-megawatt capacity fee. Portions of the rate schedule have surfaced in a federal securities filing, but TVA has not yet fulfilled The Tennessean's request for the full schedule or provided the underlying studies Shober says are needed to evaluate its protections.
What if the boom goes bust?
Power plants and transmission lines can operate for decades, potentially outlasting the data centers they were built to serve.
A 2025 report commissioned by the Southern Environmental Law Center warned that electricity forecasts may be inflated because developers request power at multiple locations and there may not be enough advanced computer chips to equip all the proposed facilities.
The report, prepared by London Economics International, estimated that planned data centers across much of the United States alone would require 90% of the world's projected increase in AI chip production through 2030, even assuming rapid manufacturing growth.
Amanda Garcia, a senior attorney with the law center, said the findings raise questions about whether utilities are building power infrastructure for demand that may never materialize.
"If the data center demand doesn't materialize because there's a bubble, then ratepayers are going to be on the hook for paying all those costs over the longer term," she said.
Power plants, transmission lines and substations can cost billions to build, with expenses recovered through electricity rates over decades. If data centers close or fail to use as much power as expected, other customers could be left paying for infrastructure built to serve them.
Garcia pointed to TVA's own history as a warning.
In the 1970s, the utility embarked on an ambitious nuclear expansion, planning 17 reactors to meet anticipated growth. But demand fell short of projections as construction costs soared. By 1984, TVA had canceled eight planned reactors, abandoning billions of dollars in investments.
TVA says its long-range planning accounts for uncertainty, including scenarios in which electricity demand grows more slowly than expected. The utility says that it does not assume every proposed data center will be built.
The trillion-dollar gamble
The uncertainty extends far beyond TVA. Economists say America's AI boom could rival the largest infrastructure expansions in the nation's history.
Stijn Van Nieuwerburgh, an economist at Columbia Business School, estimates the nation could spend $10 trillion on data centers and related infrastructure by 2032, a greater share of economic output than railroad construction consumed at its peak in the late 1800s.
His research identified 509 gigawatts of proposed data center capacity nationwide, nearly 10 times what's operating today. He estimates a more realistic total of roughly 180 gigawatts by 2032, suggesting most announced projects will never be built.
For now, he said, demand is outpacing supply. The question is when that might change.
"At which point are we beginning to overbuild it?" he asked.
Asad Ramzanali, a researcher with Vanderbilt University's Policy Accelerator, sees another risk: Technology companies are investing hundreds of billions in AI infrastructure without yet generating enough revenue to justify the spending.
"At the core of the AI economy is a basic math problem," he said.
The risks could extend far beyond Silicon Valley, Ramzanali said. While early AI investments were largely funded by technology giants' profits, the expansion increasingly relies on borrowing and outside investors, potentially exposing retirement savings and the broader economy to a downturn.
In a worst-case scenario, he said, losses could spread through financial markets, triggering a crisis reminiscent of the 2008 economic crash.
But the data center industry says demand is strong.
"It's not the dot com boom, because this is steel in the ground," said Christy Tarallo of the Data Center Coalition, pointing to strong demand and low vacancy rates as evidence the boom is sustainable.
Still, she urged communities to scrutinize developers proposing facilities they intend to lease to other companies. Without a committed tenant, she said, local officials have less assurance that a project is financially viable.
A developer unable to answer that question is a "red flag," Tarallo said, adding that responsible operators should be transparent about who will occupy their facilities.
The industry promises communities new investment, tax revenue and jobs. But across the railroad tracks from Musk's xAI facility in Memphis, Loretta Thornton said she has seen little of that prosperity.
The cost of staying
On a sweltering afternoon in Memphis, Thornton sat on her front porch as the steady hum of machinery drifted across the railroad tracks.
Her grandchildren can no longer comfortably visit because of the noise, she said.
Thornton has contacted attorneys and community organizations seeking help, without success. She's heard the noise could diminish by 2027, but remains skeptical.
She's giving it another 18 months. If conditions don't improve, she may have to leave the home where she planned to spend the rest of her life. But she wonders who would buy a house next to one of the country's largest data centers.
For now, she has little choice but to live with the noise.
"You have to endure it," she said. "You got to figure out a way to endure it."
This is the first in a three-part investigative series examining how the data center boom is reshaping Tennessee.
This article originally appeared on Nashville Tennessean: Data center boom could leave Americans 'on the hook' for big costs
