The EPA just ruled that Elon Musk’s xAI broke federal air-quality law by using dozens of portable gas generators at its Colossus 1 data center in Memphis without the required permits.
The whole point of Colossus was speed, and Musk reportedly pushed to build and power the 1-gigawatt facility as fast as possible, even if that meant cutting through regulation that normally slows projects like this down.
How xAI pulled it off
xAI relied on a local loophole that lets portable generators run without permits as long as they are not kept in the same spot for more than 364 days. That allowed the company to bring in truck-sized gas turbines quickly and generate the massive power needed to train Grok.
Why the EPA stepped in
The EPA says these generators still fall under federal regulation, meaning xAI did in fact need air permits the entire time. In other words: the loophole might work locally, but it does not override federal law.
The bigger issue
xAI is reportedly still using dozens of similar generators for Colossus 2, just over the border in Alabama, meaning this could expand into a broader regulatory and political fight over “AI infrastructure at any cost.”