KETTLE Your host Brandon Vigliarolo has been breathing in wildfire smoke from Canada for the past few days, which really has him thinking about whether all those AI datacenters building gas turbines and contributing to climate change is really worth it. You can listen to the latest episode of The Kettle right here on this page, as well as on Spotify, Apple Music, or YouTube where you can subscribe to get notified of the latest episode. Luckily for us, CNBC technology and climate reporter Lora Kolodny, who just published a documentary on xAI's environmentally damaging Colossus datacenters in Memphis, Tennessee, was available to join us as a special guest on this week's episode. Lora chats with Brandon and El Reg Editor-in-Chief Matt Rosoff about how datacenters are affecting the environment, how they could be done right, and why they keep being done wrong. A lightly edited transcript is below: Hey everyone, Brandon Vigliarolo here with the latest episode of The Register's Kettle podcast, and we've got a special one for you this week that I'll admit is a bit personal for me. If you've been following the news, you've probably heard about wildfire smoke blanketing the Great Lakes region of the United States, which is where I live. On Thursday morning, I woke to see air quality index scores nearing 1,000 in nearby towns, double the AQI scale's maximum of 500 and considered dangerously unhealthy for even fit, young individuals. So what does this have to do with tech, you may ask? Well, there's been rampant wildfires in Canada, the northern US, and the West Coast in recent years that experts say have been made far worse by climate change. And the datacenter build-out, driven by AI demand, has led many tech companies to replace sustainability promises with gas turbines, belching carbon into the atmosphere. With me to discuss the environmental impacts of datacenter projects is our editor-in-chief, Matt Rosoff. And a special guest this week, CNBC Technology and Climate Reporter Lora Kolodny, who just authored a report on XAI's role in the datacenter backlash, thanks to what's been going on in Memphis, Tennessee. Lora, Matt, thanks so much for coming on. Lora Kolodny: Thank you for having me. It's a reunion with Matt, as we used to work together and he has edited many of my past stories on this issue. Matt Rosoff: Thanks for having us. Indeed. Brandon: It's great to have someone so familiar with this topic. Let's start with your report on xAI's dealings in Memphis. You published a video and a written summary on how this project is impacting locals and the environment. Tell us what is going on there, specifically looking at the environmental side of things. Lora Kolodny: Big picture: a couple years ago, early 2024, xAI – Elon Musk's AI venture that is now part of SpaceX – moved into Memphis, into this old appliance factory, an Electrolux factory, and was building out a datacenter at breakneck speed. It was popped up in 122 days. He had to move some assets around. I had done a story about this in 2024, but Tesla had ordered half a billion dollars worth of chips from Nvidia. He said, "xAI needs those sooner," and they shifted it over. There was a lot of secrecy around it, where the company was striking land deals under little-known subsidiary names. The Memphis Chamber of Commerce was advocating for this, but not every resident was read in on the process. All of a sudden, there is this datacenter there. As you probably know from your own experience in Michigan and just reporting on this, these datacenters for AI inference and training can consume a lot more land, water, power, and equipment than some other datacenters for cloud computing. This one was massive and it had a massive footprint. Additionally, it needed a lot more power than the local utilities could immediately provide. So Musk's company did what a lot of other AI datacenter developers are doing, which is to pop up a bunch of giant natural gas or methane gas burning turbines to power it until they could get interconnected to the grid and buy a billion dollars' worth of Tesla Megapack battery systems and solar panels to help start powering it. Those gas-burning turbines just belch out emissions. The construction of it is also generating a lot of PM2.5, particulate matter 2.5, that is really damaging. Brandon: Right. Same as wildfire smoke. Lora Kolodny: Yes, really damaging. That is the thing that is damaging to respiratory health. When you read all these climate and public health reports, it is PM2.5 and things like NOx that come from burning natural gas; it's a precursor to ozone formation. When the people of Greater Memphis in and around this community became aware of what was going on, they immediately asked, "What is this? Who authorized this? Why weren't we read in? Why wasn't the public comment period more involved? Why didn't we have more buy-in." It has been drama ever since. Musk's empire there has been expanding. They have two more datacenters in this gigantic power plant in Greater Memphis, just across state lines in Mississippi, in a town called Southaven. Our documentary, a little half-hour piece for CNBC – my esteemed colleagues Janice Pettitt Heinz and Andrew Evers went down and actually we wanted to show people what we have been reporting on for a couple of years and met with residents to see how this has affected their lives. You could hear this loud whining, humming of the turbines nearby. One guy who is part of a class action lawsuit about the public noise nuisance they are alleging said it is literally a form of torture to him. It has interrupted his sleep. Brandon: That was the guy who was by the power plant, correct? Lora Kolodny: Jason Haley, yeah. All of them were telling us about these noise levels. One guy we spoke to who didn't want to go on camera said, "I don't mind it, but I'd like to sell my property to xAI." Matt Rosoff: How loud is it? What does it sound like? Lora Kolodny: It sounds like living right next door to an airport; jet engines, very loud. Brandon: Well, in Jason's video, there were a lot of clips from him with a sound meter and it was in the mid-seventies of decibels. That is loud. I think eighty is when OSHA basically says you need to be worried about hearing damage. Lora Kolodny: Yeah, and noise can be variable because you need more or less power. AI workloads are variable, and that is one thing that is challenging for the grid and off-grid power supply. It is not like the steadiness of other industrial uses of that kind of power. So the noise levels can vary based on how many turbines have to be fired up and running all the time, cooling towers, and other things. I didn't mention this, but one thing Musk's company had promised the council members in leadership positions in Memphis was, "We'll also help Memphis Light Gas and Water build out this gray water recycling facility," and that way we won't put as much stress on water demands nearby the water tables. They haven't built it yet. Brandon: That's pretty much stalled, right? Lora Kolodny: They haven't built it. It's stalled out. It didn't come online with their first datacenter or the new datacenters that are underway. There are questions now in the community about, "Can you even enforce this? Or are we just waiting for Musk to come through with this promise?" He is the king of making these big promises and then coming through with really good stuff on one front, but maybe not over here, leaving people – the state of New York with Tesla had to write down a billion dollars on a project where Musk was taking over a solar factory and ended up using it for AI data infrastructure, making charging network equipment, but not the solar panels they promised to produce there. It didn't create the high-tech clean energy jobs that were promised. It is very complicated. But what about in Michigan? Michigan has so many datacenters. What is it like reporting on this and living there? Brandon: Luckily, I am pretty isolated. I am way up in northern Michigan, in a very rural area. But most of the datacenters going in are all downstate. One of the things that is interesting is that northern Michigan is surprisingly underdeveloped in terms of large-scale infrastructure. In the northern part of the state, I think it is 350 volts – the larger power lines that oftentimes feed into these larger facilities – they terminate in a town called Gaylord and they don't really fan out across the upper part of the state. So anyone who would try to build a datacenter up here would have a lot of infrastructure needs to address, unless they were going to build on-site power. A lot of people up here are not thrilled with the idea of on-site power generation at local datacenters. They are all mostly downstate. There are some edge facilities; internet service providers have to have their local datacenters, but that is not the kind that people are concerned about. It is the colocation facilities and your hyperscalers that are really driving most of this worry. Matt Rosoff: One thing I have realized is how massive these datacenters are. We have been talking about this for twenty or thirty years now. Microsoft was building them out in rural Washington state twenty-five years ago. I think Colossus is a gigawatt, is that right? Something like that. It used to be a big one would be fifty or a hundred megawatts. A huge one was a hundred megawatts. Now these are standard; they are talking two gigawatts in Texas. I think Meta is building one in Louisiana that is going to be two to four gigawatts. They are absolutely massive facilities. They take a lot more power, they make a lot more noise, and they run a lot hotter. Brandon: In your report, Lora, you mentioned the number of turbines. A power plant using similar turbines would have four, five, maybe six. How many? Lora Kolodny: That was a climate-specialized attorney with the group that is suing SpaceXAI on behalf of the NAACP, because these developments have been in historically majority-Black and lower-wealth neighborhoods around Memphis. This is very important to the NAACP from an environmental justice perspective. They are suing and saying, "You didn't go through the Clean Air Act permitting process." Public records have shown that they are using anywhere up to fifty-nine turbines when they said they would be using far fewer. The number that are operational at a time can vary, and there are questions of oversight. You guys just reported on this with another mega-big tech company, Amazon, but there are questions about who is overseeing this? How accurate are the stats? The company promises this and they do that. They are using up to fifty-nine turbines. And these things are big. These aren't little roadside things you seen in an emergency for helping keep the traffic lights on. Brandon: These are power plant-scale turbines. I think in the report you mentioned there were times that thermal cameras had shown there were thirty-plus running at once. That is a lot of power. Lora Kolodny: That was over in the one closer to Memphis, and the Southaven one is on a decommissioned power plant site where SpaceX is going to be building out a permanent power plant site that will also be run on natural gas, which is crazy. Brandon: I remember writing about 2023, 2024, about all these hyperscalers – Google, Amazon – talking about all these nuclear deals they were making. We were going to be incorporating next-gen nuclear and all this clean energy. Surprise, surprise, just like we were saying back then, small modular reactors are perpetually a few years off, just like fusion and everything else. They are always coming soon. In the meantime, because they can't rely on this kind of power, they are building all these gas turbines. Microsoft just signed a twenty-year deal in Texas. I wrote about this, but I'm trying to remember specifics. It was a twenty-year deal to build a datacenter that was going to be entirely powered by gas turbines, with no real mention in the literature anywhere of, "We're eventually going to get this connected to the grid and try to go green." It was basically an admission that this is going to be a massive permanent gas turbine project. Lora Kolodny: Elon Musk got famous by being the green industrialist, this climate savior, but here he is building out natural gas-burning power plants. It is very revealing. Matt Rosoff: I remember a couple of years ago, we wrote something on Meta doing the same thing. They made this big announcement about how they were going to use nuclear power and then the very next day they said, "But we're building this two-gigawatt facility in Louisiana that will be entirely gas-powered." I think it is astounding. Brandon: Two days later. I wrote that because I was like, "This is two days later and you are turning right around and saying you are building this gas turbine plant right after making this huge green energy promise." Matt Rosoff: I think it is astounding how fast the big tech companies have retreated from these environmental commitments they were supposedly touting a few years ago. If you remember, the basketball and hockey stadium in Seattle is now called Climate Pledge Arena because Amazon bought the rights to it. They have basically run full speed in the other direction. AI is too important and we absolutely can't afford to lose on this. You have Doug Burgum, who is the Secretary of the Interior now, former Microsoft executive who sold a software company called Great Plains to Microsoft back in the early 2000s, and then was the governor of North Dakota. He is saying, "Forget about the climate. We can't lose AI to China. We absolutely have to do whatever it takes to win this race, no matter what." That is the tone that is being set. It is astounding to me how fast everybody retreated from these ideas that were so important three, four, or five years ago. Brandon: Eric Schmidt said in 2024 that he was confident we were not going to meet climate goals, so we should just build more AI datacenters because we have to win at this and it is more important than preserving the planet for us and our descendants. It is shocking. I wrote earlier this year that 2025 saw a tripling of gas power demand in the United States, driven in large part by datacenters. Someone I spoke to for the story told me there was going to be the equivalent of 12.1 billion tons of emissions from new gas power plants being built as of 2025, over the lifetime. That is a long-term figure, but it is not encouraging. Especially with xAI – if they are running more than they are saying they are running, can we even rely on that number? Lora Kolodny: I want to say something on the optimistic side because it can get very depressing up here in the tech climate beat. Policy is business in a sense, and we have a federal government that has more of a deregulatory and pro-business attitude that is eschewing the biggest externality there is in business, which is climate change. It is a little disconnected. Brandon: What's that? Lora Kolodny: Part of it is companies flowing whichever way the wind blows because their values always prove to be flexible. Part of it is, when it is cost-effective, like with all this demand for the turbines and for natural gas, those prices are soaring. That is not good for margins. Sometimes you see – like you were talking about Eric Schmidt – Google is in Minnesota doing a deal with Xcel Energy and others. They have agreed to power a couple of Google datacenters in and around Minnesota with an electric service agreement that is supposed to fund almost 2,000 megawatts of new renewable energy in the state and a big iron-air battery for energy storage, which is good for volatility and can make greater use of renewables. A lot of this stuff is going to emerge from local municipal regulation and also deals as people become more aware of the impact and the energy demands. And that's partly because it's now a political issue, right? Memphis has become a cautionary tale. Not everyone can build a datacenter like Musk; they don't have the resources or the attitude. But it is a cautionary tale and it is helping activists figure out what to demand and what to negotiate for. You had Governor Kathy Hochul in New York draw the ire of Trump this week by putting a one-year moratorium. A one-year delay is not that big a deal, but... Brandon: A lot of work to do in that one year. I am on a township commission working on fleshing out zoning laws for datacenters, essentially to prevent them being built up here because no one in the township wants a massive hyperscaler in this rural location. We have to move fast. We have less than a year left in this moratorium. There's a lot of work to do in the course of a year to figure those things out. Lora Kolodny: Can I ask why you don't want them? Is it, "We want it only if there is water recycling and we are assured of these property taxes?" Would you be cool with the datacenters there? Because that is what we heard in Memphis over and over. Boxtown, Southaven, Whitehaven, the places most impacted by Elon's projects were like, "We need a buy-in, we needed guarantees about this. This could have been good." Brandon: The attitude amongst the public here – excluding myself, only because I am part of the group working on these regulations – we are in a very rural coastal region of Michigan, the Lake Michigan region, and we are very, very protective of our natural resources and the beauty of the area. the tourist vibe, the woods, the trails, the hiking – everything. I think most people are just like, "We don't want even the possibility that that could disrupt the local atmosphere at all." Where I live has also been fairly resistant to development and change of any kind. Since that is a hot political issue right now, we are considering measures that would make it restrictive for people to build here. You can if you meet all these requirements, but if anyone wants to build here, they are going to have to do some very specific things, like closed-loop water, making sure light pollution is minimized, making sure there is no noise – we have been talking about a fifty-decibel limit sixty feet off the property. It is very restrictive. Lora Kolodny: The water thing is so tough. Nvidia recently developed a chip they were touting as requiring less cooling. Evaporative cooling requires less electricity, but recycled water might require more power. These companies are just dealing with so many complexities. For all their complexities, the datacenter is built and you don't need to hire that many people to operate it. Matt Rosoff: That is the thing. With these large-scale development projects, there is usually some sort of bargain. "Well, at least they are going to be good for the local economy. They will create jobs." You think about when Amazon was talking about EC2, their second headquarters, and the promise to employ tens of thousands of people. Once these things are built, not that many people work in them. Datacenters don't provide a lot of employment. The other thing is that a lot of the grassroots protests that we are seeing go back to the fact that many people do not understand what benefits AI in general is going to bring to them and to their community. You hear the fear of, "It's going to take your job and make everything harder for everybody, but we are going to build it anyway." I think people have a right to wonder, "what this is going to do for me and why am I not on board with it?" Brandon: Even businesses – from the individual consumer's perspective, I think a lot of people view AI as just this meme and fake photos machine. It puts out slop that floods the internet and doesn't do anything good. But if you think about it from the business perspective, it is not hard to find stories online about return on investment for AI just not panning out for most businesses that are using it. I feel like it is being pushed regardless of the fact that use cases haven't really materialized. Matt Rosoff: There are some things it is very good at and some things not. We haven't figured out yet what works and what doesn't. Lora Kolodny: It is very telling that the AI industry boasts about their datacenters by how many gigawatts they consume. There is no instinct towards efficiency until they are like, "The tokens are costing us a lot." They think about efficiency in terms of dollars, not environmental footprint, not the longer-term impact, and how that can harm. I remember reading in Nvidia's annual shareholders communications, they had multiple points in their annual report where they talk about climate change risk, extreme weather risk, and what it can do to datacenter development, which is driving the growth of purchases of their products. But then they advise shareholders to vote against scope three emissions reporting. Brandon: Scope three, for people who aren't familiar, it's ike suppliers and things. Matt Rosoff: Supply chain. Lora Kolodny: I think in that context, it could also account for "once we sell the GPUs, what are the emissions generated in our customers' use of our equipment – of our cutting-edge chips?" It is so mercenary and actuarial. It is all about the dollar amounts. To deal with these companies and get them to be more climate-minded, you have to deal with the dollar amounts when policy isn't a lever, when federal policy isn't a lever, and this is a deregulatory Trump administration. Brandon: I guess that begs the question: if we get an incredibly progressive, environmentally conscious Democrat or independent in office in the next election cycle, these build-outs have already begun. xAI already has this massive, fifty-turbine power plant in Mississippi for its Memphis operations. How far can that swing back? Matt Rosoff: You would probably end up seeing what Lora was alluding to before: as prices increase for natural gas, other alternative forms of energy that by chance happen to also be cleaner will become cheaper. If you have government subsidies, that can tip things over one way or the other, that might end up happening. You'll have more local solar. I remember when Apple was doing a lot of datacenter build-outs, they had their own dedicated solar facility down in Monterey. There are other ways to power these things. It is just that right now it all seems to be: build as fast as we can. This is a potentially massive market that could replace huge sectors of the economy. That is what a lot of the financiers and big tech companies believe. So it doesn't matter; race as fast as you can and we'll figure all this other stuff out later. Maybe at some point, as these things are partly built, we will start to see them be powered by different kinds of energy. Lora Kolodny: There is also grid utilization, just making more of what we have with the transmission lines and the sources we have. I have seen some interesting climate-tech startups tackling this. Something that is amazing to me is when you had an Electrolux factory in Memphis making appliances, everyone can see it. What is being made in the AI factory? It is defense tech systems... After the NAACP filed a suit in a federal court in the Northern District of Mississippi, the DOJ stepped in. Musk is a great ally of Trump; he helped propel him back into office. You have the DOJ and the Department of Defense, to which Musk is a key supplier and prime contractor with SpaceX, stepping in and saying the NAACP suit threatens national security. Citizens asking to enforce the Clean Air Act is somehow threatening national security because xAI's Grok – the military version of it – was used in our military operations in Iran, and we are using xAI stuff for national security. They have filed a motion to intervene and are asking to toss the lawsuits. Matt Rosoff: I didn't realize anybody was using Grok. Brandon: Ha! Matt Rosoff: The only people I know who are using it are tech bros. Lora Kolodny: It is the number one app for people who want to generate a certain kind of non-consensual imagery, studies have found. Matt Rosoff: That is correct. I had someone demo that to me in real time in a bar not too long ago. Brandon: As a selling point? That doesn't exactly say, "Hey, check this out." Matt Rosoff: No, this bro, he was making a joke and he showed me on the phone, "Here's an imaginary video with you and a person who doesn't exist." I was like, "Whoa, dude, what are you doing? How are you doing this?" He is like, "It's Grok." I'm like, "Of course it is." Lora Kolodny: There are so many municipal and state-level things getting done right now because that federal motivation to enforce the Clean Air Act has gone away and corporations have been like, "You're not messing with that." We could just build fast, get ahead, see what we can get away with. I am watching all of that stuff, like from Olive Branch and Jackson that responded directly to Memphis, changing some zoning laws so they can close loopholes that have allowed Musk to build out faster nearby. I mentioned in New York, the moratorium; Ohio took away some tax breaks for datacenter developers; and in New Jersey, the governor, Mikie Sherrill, signed a set of legislation into law about a week back where she was like, "datacenters have to actually pay for all the support on the grid that is needed to power them. We're not passing this on to residents and businesses." It is all getting worked out and it is really interesting to see it come down to the local and municipal level since the federal level is not dealing with it. Matt Rosoff: There seems to be a lot of grassroots organization against these things. A relative whose family lives in a rural community in eastern Tennessee, and just the rumor of the possibility of a datacenter being built in the area was enough to get people out at the city council meeting creating protests. The town government had to come and say, "No, we don't have anything happening, we have nothing that's actually going on here." They could have been lying, but that was the thought. This is a place that, if you go back a generation, was a paper mill, and then that's been replaced by an Amazon fulfillment center. This is kind of the next step. At least the Amazon fulfillment center employs local people. These datacenters don't do a lot for the local economies. Lora Kolodny: Not after construction. I am very interested in: do you understand the AI factory next door and what they make? Are you proud of it? I don't think enough of us tech reporters are asking people who live next door if they understand what the AI factory is making and how they feel about it. I do think we need datacenters at this next frontier. Think about all the good robotics can do, just environmentally – autonomous boats that take oceanographic measurements or push garbage out of the way. There is so much in robotics tied to AI, and that is my jam. But I also think about all the developers we interview who are finding much more value in AI than we might through chatbots or the next era of search. It is like, "What is this?" Or AI image generation – I don't need that because I can do the art or work with a graphic artist. We don't need AI assistance with our writing if we are writers. But if we need these datacenters, you hope they are connected to the grid and fund a more efficient, more powerful grid and don't put a bunch of pollution out there, or use so much water it is endangering our water table. It is a quandary. Brandon: I think that is what was said at the end of your video: there is a way to do this right. The problem is that "right" is being given away too quickly because the demand is right here and now. In exchange, we are belching more carbon into the atmosphere, which is causing worse wildfire seasons, which is forcing me to close my windows and lock my doors when I don't have air conditioning. Lora Kolodny: It is devastating. I am based in San Francisco and we had the famous Orange Sky Day that woke up the US to how that works here – not just near areas where there is a lot of logging, but big cities. I was in New York City this week visiting family, and it was oppressive. It was so hazy you couldn't see the skyline normally. This is from the Canada fires that you are also getting. People have a tendency to not take these climate issues seriously unless we can translate it into how this literally affects your life, hits your wallet, and hits your business bottom line. I know it sounds gauche because it is so much more important than just dollars, but if you can communicate some of it in dollars, it gets through to people differently. If you want to talk to the right about renewable energy, it is about energy independence and dominance, or the cost of energy needed in the United States and our business world. If you want to talk on the left, it is biodiversity and the spotted tree owl or whatever – more holistic environmental considerations, ecological considerations. I love all those things. Let's talk about climate on all those points. It is such an inflection point. Matt Rosoff: With the AI boom, it's this financial imbalance where there is going to be huge opportunity in it. We don't know exactly what it's going to look like, but let's just run as fast as we can now while the financing is there, the tokens are subsidized, and so forth. It will all shake out, I think, over the next five years. Brandon: Let's hope it shakes out for the better. There is always the possibility that the bubble could pop before then and we could have some great rebalancing, but we'll see. We'll be here to cover it all on the Kettle. Lora, thanks again so much for joining us. Matt, thanks for clearing the time on your busy schedule to come on. We will talk to you all very soon. ®