Cheyenne is no stranger to data centers, having attracted facilities from Microsoft and Meta since 2012 due to its cool climate and energy access. However, the new project pushes the state into uncharted territory. While Wyoming is the nation’s third-biggest net energy supplier, producing 12 times more total energy than it consumes (dominated by fossil fuels), its electricity supply is finite.
While Tallgrass and Crusoe have announced the partnership, they haven’t revealed who will ultimately use all this computing power—leading to speculation about potential tenants.
A potential connection to OpenAI’s Stargate AI infrastructure project, announced in January, remains a subject of speculation. When asked by The Associated Press if the Cheyenne project was part of this effort, Crusoe spokesperson Andrew Schmitt was noncommittal. “We are not at a stage that we are ready to announce our tenant there,” Schmitt said. “I can’t confirm or deny that it’s going to be one of the Stargate.”
OpenAI recently activated the first phase of a Crusoe-built data center complex in Abilene, Texas, in partnership with Oracle. Chris Lehane, OpenAI’s chief global affairs officer, told The Associated Press last week that the Texas facility generates “roughly and depending how you count, about a gigawatt of energy” and represents “the largest data center—we think of it as a campus—in the world.”
OpenAI has committed to developing an additional 4.5 gigawatts of data center capacity through an agreement with Oracle. “We’re now in a position where we have, in a really concrete way, identified over five gigawatts of energy that we’re going to be able to build around,” Lehane told the AP. The company has not disclosed locations for these expansions, and Wyoming was not among the 16 states where OpenAI said it was searching for data center sites earlier this year.
Evidence suggests health department gave preferential treatment to xAI, NAACP says.
Local students speak in opposition to a proposal by Elon Musk’s xAI to run gas turbines at its data center during a public comment meeting hosted by the Shelby County Health Department at Fairley High School on xAI’s permit application to use gas turbines for a new data center in Memphis, TN on April 25, 2025. Credit: The Washington Post / Contributor | The Washington Post
xAI continues to face backlash over its Memphis data center, as the NAACP joined groups today appealing the issuance of a recently granted permit that the groups say will allow xAI to introduce major new sources of pollutants without warning at any time.
The battle over the gas turbines powering xAI’s data center began last April when thermal imaging seemed to show that the firm was lying about dozens of seemingly operational turbines that could be a major source of smog-causing pollution. By June, the NAACP got involved, notifying the Shelby County Health Department (SCHD) of its intent to sue xAI to force Elon Musk’s AI company to engage with community members in historically Black neighborhoods who are believed to be most affected by the pollution risks.
But the NAACP’s letter seemingly did nothing to stop the SCHD from granting the permits two weeks later on July 2, as well as exemptions that xAI does not appear to qualify for, the appeal noted. Now, the NAACP—alongside environmental justice groups; the Southern Environmental Law Center (SELC); and Young, Gifted and Green—is appealing. The groups are hoping the Memphis and Shelby County Air Pollution Control Board will revoke the permit and block the exemptions, agreeing that the SCHD’s decisions were fatally flawed, violating the Clean Air Act and local laws.
SCHD’s permit granted xAI permission to operate 15 gas turbines at the Memphis data center, while the SELC’s imaging showed that xAI was potentially operating as many as 24. Prior to the permitting, xAI was accused of operating at least 35 turbines without the best-available pollution controls.
In their appeal, the NAACP and other groups argued that the SCHD put xAI profits over Black people’s health, granting unlawful exemptions while turning a blind eye to xAI’s operations, which allegedly started in 2024 but were treated as brand new in 2025.
Significantly, the groups claimed that the health department “improperly ignored” the prior turbine activity and the additional turbines still believed to be on site, unlawfully deeming some of the turbines as “temporary” and designating xAI’s facility a new project with no prior emissions sources. Had xAI’s data center been categorized as a modification to an existing major source of pollutants, the appeal said, xAI would’ve faced stricter emissions controls and “robust ambient air quality impacts assessments.”
And perhaps more concerningly, the exemptions granted could allow xAI—or any other emerging major sources of pollutants in the area—to “install and operate any number of new polluting turbines at any time without any written approval from the Health Department, without any public notice or public participation, and without pollution controls,” the appeal said.
The SCHD and xAI did not respond to Ars’ request to comment.
Officials accused of cherry-picking Clean Air Act
The appeal called out the SCHD for “tellingly” omitting key provisions of the Clean Air Act that allegedly undermined the department’s “position” when explaining why xAI qualified for exemptions. Groups also suggested that xAI was getting preferential treatment, providing as evidence a side-by-side comparison of a permit with stricter emissions requirements granted to a natural gas power plant, issued within months of granting xAI’s permit with only generalized emissions requirements.
“The Department cannot cherry pick which parts of the federal Clean Air Act it believes are relevant,” the appeal said, calling the SCHD’s decisions a “blatant” misrepresentation of the federal law while pointing to statements from the Environmental Protection Agency (EPA) that allegedly “directly” contradict the health department’s position.
For some Memphians protesting xAI’s facility, it seems “indisputable” that xAI’s turbines fall outside of the Clean Air Act requirements, whether they’re temporary or permanent, and if that’s true, it is “undeniable” that the activity violates the law. They’re afraid the health department is prioritizing xAI’s corporate gains over their health by “failing to establish enforceable emission limits” on the data center, which powers what xAI hypes as the world’s largest AI supercomputer, Colossus, the engine behind its controversial Grok models.
Rather than a minor source, as the SCHD designated the facility, Memphians think the data center is already a major source of pollutants, with its permitted turbines releasing, at minimum, 900 tons of nitrogen oxides (NOx) per year. That’s more than three times the threshold that the Clean Air Act uses to define a major source: “one that ’emits, or has the potential to emit,’ at least 250 tons of NOx per year,” the appeal noted. Further, the allegedly overlooked additional turbines that were on site at xAI when permitting was granted “have the potential to emit at least 560 tons of NOx per year.”
But so far, Memphians appear stuck with the SCHD’s generalized emissions requirements and xAI’s voluntary emission limits, which the appeal alleged “fall short” of the stringent limits imposed if xAI were forced to use best-available control technologies. Fixing that is “especially critical given the ongoing and worsening smog problem in Memphis,” environmental groups alleged, which is an area that has “failed to meet EPA’s air quality standard for ozone for years.”
xAI also apparently conducted some “air dispersion modeling” to appease critics. But, again, that process was not comparable to the more rigorous analysis that would’ve been required to get what the EPA calls a Prevention of Significant Deterioration permit, the appeal said.
Groups want xAI’s permit revoked
To shield Memphians from ongoing health risks, the NAACP and environmental justice groups have urged the Memphis and Shelby County Air Pollution Control Board to act now.
Memphis is a city already grappling with high rates of emergency room visits and deaths from asthma, with cancer rates four times the national average. Residents have already begun wearing masks, avoiding the outdoors, and keeping their windows closed since xAI’s data center moved in, the appeal noted. Residents remain “deeply concerned” about feared exposure to alleged pollutants that can “cause a variety of adverse health effects,” including “increased risk of lung infection, aggravated respiratory diseases such as emphysema and chronic bronchitis, and increased frequency of asthma attack,” as well as certain types of cancer.
In an SELC press release, LaTricea Adams, CEO and President of Young, Gifted and Green, called the SCHD’s decisions on xAI’s permit “reckless.”
“As a Black woman born and raised in Memphis, I know firsthand how industry harms Black communities while those in power cower away from justice,” Adams said. “The Shelby County Health Department needs to do their job to protect the health of ALL Memphians, especially those in frontline communities… that are burdened with a history of environmental racism, legacy pollution, and redlining.”
Groups also suspect xAI is stockpiling dozens of gas turbines to potentially power a second facility nearby—which could lead to over 90 turbines in operation. To get that facility up and running, Musk claimed that he will be “copying and pasting” the process for launching the first data center, SELC’s press release said.
Groups appealing have asked the board to revoke xAI’s permits and declare that xAI’s turbines do not qualify for exemptions from the Clean Air Act or other laws and that all permits for gas turbines must meet strict EPA standards. If successful, groups could force xAI to redo the permitting process “pursuant to the major source requirements of the Clean Air Act” and local law. At the very least, they’ve asked the board to remand the permit to the health department to “reconsider its determinations.”
Unless the pollution control board intervenes, Memphians worry xAI’s “unlawful conduct risks being repeated and evading review,” with any turbines removed easily brought back with “no notice” to residents if xAI’s exemptions remain in place.
“Nothing is stopping xAI from installing additional unpermitted turbines at any time to meet its widely-publicized demand for additional power,” the appeal said.
NAACP’s director of environmental justice, Abre’ Conner, confirmed in the SELC’s press release that his group and community members “have repeatedly shared concerns that xAI is causing a significant increase in the pollution of the air Memphians breathe.”
“The health department should focus on people’s health—not on maximizing corporate gain,” Conner said.
Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.
Before xAI got the permit, residents were stuck relying on infrequent thermal imaging to determine how many turbines appeared to be running without BACT. Now that xAI has secured the permit, the company will be required to “record the date, time, and durations of all startups, shutdowns, malfunctions, and tuning events” and “always minimize emissions including startup, shutdown, maintenance, and combustion tuning periods.”
These records—which also document fuel usage, facility-wide emissions, and excess emissions—must be shared with the health department semiannually, with xAI’s first report due by December 31. Additionally, xAI must maintain five years of “monitoring, preventive, and maintenance records for air pollution control equipment,” which the department can request to review at any time.
For Memphis residents worried about smog-forming pollution, the worst fear would likely be visibly detecting the pollution. Mitigating this, xAI’s air permit requires that visible emissions “from each emission point at the facility shall not exceed” 20 percent in opacity for more than minutes in any one-hour period or more than 20 minutes in any 24-hour period.
It also prevents xAI from operating turbines all the time, limiting xAI to “a maximum of 22 startup events and 22 shutdown events per year” for the 15 turbines included in the permit, “with a total combined duration of 110 hours annually.” Additionally, it specifies that each startup or shutdown event must not exceed one hour.
A senior communications manager for the SELC, Eric Hilt, told Ars that the “SELC and our partners intend to continue monitoring xAI’s operations in the Memphis area.” He further noted that the air permit does not address all of citizens’ concerns at a time when xAI is planning to build another data center in the area, sparking new questions.
“While these permits increase the amount of public information and accountability around 15 of xAI’s turbines, there are still significant concerns around transparency—both for xAI’s first South Memphis data center near the Boxtown neighborhood and the planned data center in the Whitehaven neighborhood,” Hilt said. “XAI has not said how that second data center will be powered or if it plans to use gas turbines for that facility as well.”
OpenAI hopes to convince the White House to approve a sprawling plan that would place 5-gigawatt AI data centers in different US cities, Bloomberg reports.
The AI company’s CEO, Sam Altman, supposedly pitched the plan after a recent meeting with the Biden administration where stakeholders discussed AI infrastructure needs. Bloomberg reviewed an OpenAI document outlining the plan, reporting that 5 gigawatts “is roughly the equivalent of five nuclear reactors” and warning that each data center will likely require “more energy than is used to power an entire city or about 3 million homes.”
According to OpenAI, the US needs these massive data centers to expand AI capabilities domestically, protect national security, and effectively compete with China. If approved, the data centers would generate “thousands of new jobs,” OpenAI’s document promised, and help cement the US as an AI leader globally.
But the energy demand is so enormous that OpenAI told officials that the “US needs policies that support greater data center capacity,” or else the US could fall behind other countries in AI development, the document said.
Energy executives told Bloomberg that “powering even a single 5-gigawatt data center would be a challenge,” as power projects nationwide are already “facing delays due to long wait times to connect to grids, permitting delays, supply chain issues, and labor shortages.” Most likely, OpenAI’s data centers wouldn’t rely entirely on the grid, though, instead requiring a “mix of new wind and solar farms, battery storage and a connection to the grid,” John Ketchum, CEO of NextEra Energy Inc, told Bloomberg.
That’s a big problem for OpenAI, since one energy executive, Constellation Energy Corp. CEO Joe Dominguez, told Bloomberg that he’s heard that OpenAI wants to build five to seven data centers. “As an engineer,” Dominguez said he doesn’t think that OpenAI’s plan is “feasible” and would seemingly take more time than needed to address current national security risks as US-China tensions worsen.
OpenAI may be hoping to avoid delays and cut the lines—if the White House approves the company’s ambitious data center plan. For now, a person familiar with OpenAI’s plan told Bloomberg that OpenAI is focused on launching a single data center before expanding the project to “various US cities.”
Bloomberg’s report comes after OpenAI’s chief investor, Microsoft, announced a 20-year deal with Constellation to re-open Pennsylvania’s shuttered Three Mile Island nuclear plant to provide a new energy source for data centers powering AI development and other technologies. But even if that deal is approved by regulators, the resulting energy supply that Microsoft could access—roughly 835 megawatts (0.835 gigawatts) of energy generation, which is enough to power approximately 800,000 homes—is still more than five times less than OpenAI’s 5-gigawatt demand for its data centers.
Ketchum told Bloomberg that it’s easier to find a US site for a 1-gigawatt data center, but locating a site for a 5-gigawatt facility would likely be a bigger challenge. Notably, Amazon recently bought a $650 million nuclear-powered data center in Pennsylvania with a 2.5-gigawatt capacity. At the meeting with the Biden administration, OpenAI suggested opening large-scale data centers in Wisconsin, California, Texas, and Pennsylvania, a source familiar with the matter told CNBC.
During that meeting, the Biden administration confirmed that developing large-scale AI data centers is a priority, announcing “a new Task Force on AI Datacenter Infrastructure to coordinate policy across government.” OpenAI seems to be trying to get the task force’s attention early on, outlining in the document that Bloomberg reviewed the national security and economic benefits its data centers could provide for the US.
In a statement to Bloomberg, OpenAI’s spokesperson said that “OpenAI is actively working to strengthen AI infrastructure in the US, which we believe is critical to keeping America at the forefront of global innovation, boosting reindustrialization across the country, and making AI’s benefits accessible to everyone.”
Big Tech companies and AI startups will likely continue pressuring officials to approve data center expansions, as well as new kinds of nuclear reactors as the AI explosion globally continues. Goldman Sachs estimated that “data center power demand will grow 160 percent by 2030.” To ensure power supplies for its AI, according to the tech news site Freethink, Microsoft has even been training AI to draft all the documents needed for proposals to secure government approvals for nuclear plants to power AI data centers.
