MEMPHIS, Tenn. — xAI’s Colossus data center in Memphis was issued a cutoff notice for a past-due bill by the local utility company in June, a month when it owed nearly $1 million for electricity, gas and water service.
But xAI says the company has paid its bills on time and in full, saying the notices were the result of internal accounting errors on the part of the utility.
Memphis Light Gas & Water confirmed that statement, saying, “xAI is current on its bill. MLGW continues to work with xAI on any billing concerns. There was a routing issue on MLGW’s side that has been corrected.”
The latest notice was mailed June 3 by Memphis Light, Gas & Water to CTC Property LLC, a real estate holding company affiliated with xAI, for the property at 3231 Paul R. Lowry Road, according to utility bills obtained by WREG through a Freedom of Information Act request.
“The past due balance must be received or satisfactory payment arrangements made to avoid automatic disconnection of service,” the bill stated.
The company owed $983,367 to MLGW, due July 3.
It’s not the first past-due notice mailed to the company this year. Similar notices were issued in January and February, according to the MLGW bills.
The company had balance forwards in January and February, but were paying their bill in full March, April and May. Then came the June cutoff.
The bulk of the bills went to electricity, with the company paying $300,000 to $400,000 every month. Water bills ranged from $800 to $1,200.
July’s MLGW bill amount marked a significant increase for the company — bills for the two prior months were for $459,000 and $449,000.
WREG reached out to xAI. Company spokesperson Katie Miller said they were “100% current” on their utility bills. She said MLGW would fix the error internally, adding that xAI and MLGW met weekly.
xAI, an artificial intelligence company founded by Elon Musk, brought its first supercomputer in southwest Memphis online a year ago, at an estimated cost of between $3 billion and more than $8 billion, according to Grok, the AI bot run by the computer.
The City of Memphis estimates xAI will pay $12 million in property tax, and $14 million to Shelby County this year.
The company says it is building a second data center on Tulane Road in Memphis, and recently purchased a power plant just across the state line in Southaven, Mississippi. It also is building an $80 million wastewater recycling facility that will cool its computer and be used by surrounding industries in Memphis when it goes online next year.
The data center uses battery megapacks for backup power, with gas-powered turbines for secondary backup power. Those turbines have come under fire from environmental groups for their alleged emissions, but the company says they use some of the cleanest technology available. A solar farm also is under consideration to generate up to 100 MW of electricity a year.