SpaceXAI to Resume Work on Memphis Data Center Wastewater Facility by Q1 2027

SpaceXAI plans to resume construction of its Memphis wastewater treatment facility by Q1 2027, nearly a year after the project stalled. The company has informed local officials that the $80 million plant will support its nearby data centers. First announced in February 2025, the facility described by SpaceXAI (formerly xAI) as the largest of its kind will recycle up to 49.2 million liters (13 million gallons) of wastewater per day and supply excess water to other Memphis businesses, helping reduce pressure on the Memphis Sand Aquifer.

Work on SpaceXAI’s Memphis wastewater treatment plant began in September 2025 but stalled in April as the company shifted resources ahead of a planned SpaceX IPO and following its merger with xAI in February 2026. Elon Musk said the priority is completing and stabilizing the “Colossus 2” data center before resuming the project. Memphis officials recently met with SpaceXAI representatives to discuss next steps, according to the Daily Memphian

“The City of Memphis can confirm that SpaceXAI has committed to resuming construction of its recycled wastewater treatment facility no later than Q1 2027,” a City of Memphis statement said. “The facility is critical infrastructure that will offset water usage from both SpaceXAI and [Tennessee grid provider] TVA. Mayor Young will continue the persistent engagement that led to this commitment until the facility is complete.”

SpaceXAI operates two data centers in Memphis, with a third under construction. The sites host its Colossus supercomputer and provide capacity to customers including Google, Anthropic, Cursor (which SpaceXAI is acquiring), and Reflection. The company has faced environmental criticism in the area, including claims that its use of portable natural gas turbines is harming local air quality. Last week, the U.S. Department of Justice urged a federal court to dismiss a lawsuit filed by the NAACP over the issue.