SpaceXAI will resume Memphis wastewater plant construction by Q1 2027.
The $80M greywater facility cools Colossus, a massive AI data center.
Memphis mayor pledges to stay engaged with SpaceXAI to ensure plant is built.
SpaceXAI’s (formerly xAI) promise to build a wastewater treatment plant to cool its Colossus supercomputer and data center campus in Memphis, Tennessee is back on—but work won’t resume for months—according to Mayor Paul Young.
Mayor Young posted on X this week, after meeting with SpaceXAI President Michael Nicolls, that, “[Nicolls] committed to resuming construction on the recycled wastewater treatment facility no later than Q1 2027.”
Young added, “Our engagement will continue until complete.”
Colossus became “the most powerful AI training system” at launch, per SpaceXAI. The company says it then doubled the site’s capabilities just 92 days later, using 200,000 GPUs from NVIDIA.
CLICK HERE to get official documents and up-to-date plans related to the SpaceXAI Colossus facility in Memphis, courtesy of ConstructConnect® Project Intelligence.
SpaceXAI initially broke ground on the $80 million project in October 2025, which would repurpose wastewater (also known as greywater) from a Memphis-area sewage treatment plant to help regulate the temperature at the Colossus site.
However, work abruptly stopped months later.
It was back in April 2026 that then-named xAI announced it had officially paused the planned build, saying, “The team is currently prioritizing other more immediate projects at the site but our plans to build the water plant have not changed.”
CEO Elon Musk affirmed the statement, quoting the post and tweeted, “We need to focus on finishing Colossus 2 [the next phase of the overarching Memphis project] and ensuring it is extremely stable, then will build the water recycling plant.”
At the time, Young pledged, “I will keep pressing [xAI leadership] until this project moves forward.”
In addition to the unnamed “more immediate projects” referenced in the xAI statement, preparations were also underway for June’s record-setting $75 billion initial public offering (IPO) of SpaceX. That move lead to the combination of Musk’s SpaceX and xAI companies; forming the new SpaceXAI brand.
According to the Environmental and Energy Study Institute (EESI), large data centers can consume up to 5 million gallons of water every day.
ConstructConnect News reported earlier this month that the AI data center boom in the United States is increasingly colliding with water constraints. About two-thirds of planned U.S. data centers are located in areas that have experienced drought, and that’s raising tougher questions about cooling, permitting, and supporting infrastructure.
In addition to recycling water, Musk had previously announced plans to break down, ship, and reassemble a gas-fired power plant to help with power generation at the Colossus site. No further timetable was ever given after Musk confirmed the initial plan in July 2025.
In his latest commentary for ConstructConnect News, former Chief Economist Alex Carrick cited Musk's announced power plant repurposing as a noteworthy side conversation in the wake of ongoing back-and-forth negotiations over the Strait of Hormuz, which have strained global fossil fuel supplies.
Dubbing the ordeal, “A truly messy set of circumstances,” Carrick commented, “The military action launched by the U.S. and Israel against Iran has led to a stalemate in which energy shipments by tankers through the Strait of Hormuz have been blockaded, lifting the global price of oil and sending the cost of gasoline skyward everywhere.”
Whether it be through recycling wastewater or shipping an existing power plant piece-by-piece, data center developers are investing more in creative energy solutions to make their projects both operational and viable—especially in areas where planned data centers are meeting resistance.
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