MEMPHIS, Tenn. — Local leaders react to Mayor Paul Young’s artificial intelligence tax proposal that could boost Memphis neighborhoods.

Mayor Paul Young pitched City Council members on Tuesday on what he called a first-of-its-kind program that will use tax money generated by “artificial intelligence property” to support surrounding neighborhoods.

The proposed ordinance would designate 25% of the property tax revenues generated by two xAI sites — one in Boxtown and one in Whitehaven — to be used for infrastructure improvements within five miles of those sites.

“This has never been done before, and ordinance I like to refer to as a community benefit ordinance,” said Mayor Young.

“The dollars can be used to fund infrastructure improvement, so things like potholes, streets, sidewalks,” said Mayor Young.

This map shows the initial investment zones covering a five-mile radius from xAI’s campus in Southwest Memphis.

The city is set to receive about $12 million in tax revenue from xAI, Young told WREG last month. The company’s Colossus artificial intelligence supercomputer was brought online last year, and a second site is under construction.

The mayor said the council will have the opportunity to modify or renew the ordinance after xAI’s $100 million investment.

“Here’s the other thing to think about: those funds are only going to grow over some period of time,” said Bobby White, Greater Memphis Chamber.

The Greater Memphis Chamber says growth is in the future, claiming it has bout 15,000 jobs it’s trying to secure as companies express interest in xAI.

“I think there is more information starting to come out where people are understanding those concerns are thing that have been over-hyped, but again a benefit they will real soon,” said White.

Some city council members expressed support for the project but they still have concerns.

“I think it’s a great start, but I just want to make sure that it’s not a collection of money that is not– doesn’t have a purpose and is not spent intentionally,” said Janika White, Memphis councilwoman.

“How do we safeguard, what are the rails to make sure that this isn’t just for 5 years?” said Yolanda Cooper-Sutton, Memphis councilwoman.

The city plans to launch an online portal over the next few weeks, allowing residents to request projects. A survey asking residents how they think this money should be spent will be sent out Tuesday.

 “I feel conflicted, I mean you take it and they say you are taking blood money, but if you don’t then you are missing a great opportunity,” said County Commissioner Brittney Thornton.

“With your support and the allocations of those funds, we can realize the fruition of our goals,” said Barbara Britton, Boxtown Neighborhood Association.

“There is such a thing as this thing going too far, and so I’m just like, I would hate for us 10 years down the line saying we made the biggest mistake,” said Commissioner Thorton.