Memphis City Council voted 7-5 last week to postpone, for the second time, a decision on a proposed 12-month moratorium on new data centers. A final vote is now likely on October 20, allowing time for further debate on the measure proposed by councilor JB Smiley Jr.

More than 100 residents attended the meeting, most of them opposing data center development. Protesters chanted "this is our city" and "show me what democracy looks like" as police officers cleared the council chamber, Fox News Memphis reported. A fight broke out outside the council offices, though police said they made no arrests.

The proposed moratorium would pause new data center approvals for one year while the council assesses the social, health, and environmental impact of digital infrastructure projects in the area.

What is driving the opposition?

Memphis is not a large data center market, but it hosts several facilities operated by Elon Musk's xAI, now rebranded as SpaceXAI. Built over the last two years, these sites power the company's Grok chatbot and provide cloud services to clients including generative AI company Anthropic.

Environmental and civil rights campaigners have filed multiple lawsuits against the company. They claim xAI violated its permits in its use of gas turbines, which allowed the company to bring its data center online quickly.

The backlash in Memphis fits a wider pattern. Communities across the US are putting forward similar measures as opposition to AI and data centers grows, and some moratoriums have been introduced at the state level.

Why did councilors delay again?

Opposition to the data centers in Memphis is considerable, but some councilors argue a moratorium would harm local economic development. Data center companies could take their tax dollars elsewhere, they say.

One of Musk's data centers already sits across the state border in Mississippi, so future development at that site would fall outside any Memphis moratorium.

Speaking to WREG, councilor Jeff Warren said: "If we pass a moratorium, there's no reason for them to think they need to come here. They get the same benefit from going to DeSoto County, Crittenden County, Fayette County, Tipton County."

This is the second time councilors have delayed a decision on whether to introduce the moratorium. The October 20 session will determine whether Memphis joins the growing list of US jurisdictions pausing data center construction — or leaves the door open for developers weighing the Memphis metro area against neighboring counties in Mississippi, Arkansas, and Tennessee.