Written by: JR Robinson

April 8, 2025 – In June 2024, Memphis officials made a decision that would alter the city’s future—and they did it in the dark. Behind closed doors, representatives from Elon Musk’s xAI and the Greater Memphis Chamber handed city leaders non-disclosure agreements (NDAs), binding them to secrecy about a project that would soon become the largest supercomputer hub in the world. Over 200,000 Nvidia GPUs now hum in South Memphis, but the toxic fallout from those NDAs is only just beginning.

The Night the Lights Went Out on Democracy
On June 5, 2024, the Greater Memphis Chamber announced xAI’s “Colossus” project as a $12 billion investment that would position Memphis as the “global epicenter of AI.” What they didn’t mention: the deal had been sealed months earlier.

• The Shell Game: xAI negotiated through CTC Property, a shell company managed by Musk’s longtime banker, Jared Birchall. Internal emails reveal Birchall demanded NDAs from city staff as early as February 2024, citing “proprietary trade secrets.”
• Silenced Officials: At least 14 city employees—including MLGW executives and planning commissioners—signed NDAs forbidding them from discussing xAI’s power demands, environmental impact, or even the project’s existence. “We were told this was standard for ‘high-value economic development,’” said one anonymous official.
• Council Left in the Dark: City councilors learned about Colossus from the Chamber’s press release. “No public hearings, no environmental review—just a done deal,” said councilmember Rhonda Logan.

By July, methane-powered turbines were already pumping formaldehyde into Boxtown, a majority-Black neighborhood where asthma rates are 3x the national average.

The Fine Print That Locked Memphis Into a “Forever Deal”
Leaked documents obtained through public records requests reveal the NDA’s chilling scope:

1. No Exit Clause: The agreement binds Memphis to “perpetual confidentiality,” even if xAI violates environmental laws.
2. Liability Shield: xAI disclaimed responsibility for “any health impacts, infrastructure strain, or third-party claims” related to the project.
3. Data Blackout: MLGW agreed to withhold electricity usage data from the public, citing “national security concerns” tied to AI development.

“This wasn’t a negotiation—it was a corporate takeover,” said KeShaun Pearson, president of Memphis Community Against Pollution (MCAP). “They treated our city like a vending machine: insert NDAs, extract resources.”

MLGW’s $760,000 Betrayal
While residents faced rolling blackouts during a July 2024 heatwave, MLGW quietly fast-tracked a $760,000 upgrade to power xAI’s facility. Internal memos show:

• Ratepayer Subsidies: MLGW committed to rebating xAI’s electricity costs until 2027—a $24 million burden on households already struggling with 12% rate hikes.
• The “Voltagrid Loophole”: When the grid couldn’t meet xAI’s demands, MLGW approved 14 diesel generators (35MW total) as a “temporary” fix. They’re still running.
• Water Grab: xAI’s cooling systems drain 1.2 million gallons daily from the Memphis Sand Aquifer, yet the company pays industrial rates 40% below residential tiers.

“We’re subsidizing a billionaire to poison our community,” said Boxtown resident Marcia Hayes, whose water bill doubled last winter.

The Fight to Break the Silence
Community groups have waged a 10-month legal battle to unmask the NDAs:

• SELC’s Standoff: The Southern Environmental Law Center sued MLGW in September 2024, arguing the NDAs violate Tennessee’s Open Records Act. A ruling is pending.
• Whistleblower Fallout: A former Chamber staffer leaked draft NDAs to MCAP in November 2024, revealing xAI’s demand for “no-contact zones” around its facility—effectively banning protests.
• Council Revolt: In March 2025, six councilmembers introduced the “xAI Transparency Act,” seeking to void the NDAs. Mayor Paul Young vetoed it, calling the move “anti-business.”

Despite promises of “thousands of jobs,” xAI has hired only 37 local workers—all security guards and janitors.

Why the NDAs Still Haven’t Been Released
xAI and the Chamber are using every tool to keep the documents hidden:

1. National Security Claims: xAI’s lawyers argue releasing the NDAs would “aid foreign adversaries” by exposing AI infrastructure details.
2. Endless Appeals: MLGW has delayed 14 public records requests, citing “ongoing litigation.”
3. Fear Tactics: Three city employees who considered leaking documents received cease-and-desist letters from xAI’s legal team.

“Secrecy is the lifeblood of this project,” said ACLU-Tennessee director Kathy Sinback. “If Memphians saw how little they gained and how much they gave up, there’d be riots.”

A Blueprint for Corporate Capture
Memphis isn’t unique. xAI’s playbook mirrors Musk’s Texas and Nevada deals, where NDAs and lax oversight enabled rapid expansion:

• Texas: In Austin, Tesla’s Gigafactory used similar NDAs to bypass emissions reviews, resulting in $14 million in EPA fines.
• Nevada: State officials signed NDAs with SpaceX in 2023, hiding rocket fuel leaks that contaminated Lake Tahoe.

“Wherever Musk goes, democracy dims,” said Princeton environmental policy professor Dr. Lisa Garcia. “These NDAs are corporate colonialism dressed as innovation.”

What’s Next?
On April 15, the Tennessee Supreme Court will hear arguments in SELC’s lawsuit. A ruling against MLGW could force the release of all xAI contracts—and set a precedent for corporate accountability nationwide.

For now, the NDAs remain locked in a vault at MLGW headquarters. But in Boxtown, the fumes from xAI’s turbines are a daily reminder: secrecy has a price.