xAI has committed to resuming construction of a wastewater recycling facility in Memphis, Tennessee, by the first quarter of 2027, a move city officials say will help reduce reliance on the region's drinking water aquifer while supporting cooling operations for the company's growing artificial intelligence infrastructure.

According to Memphis Mayor Paul Young, the commitment came during a recent meeting with xAI representatives and leaders from Memphis Light, Gas and Water. The project was originally launched in October 2025 but was paused earlier this year as the company shifted resources toward expansion of its Colossus 2 supercomputer facility.

The planned $80 million water reuse facility would treat and recycle wastewater from a nearby municipal treatment plant for industrial cooling. Once operational, the facility is expected to process up to 13 million gallons of treated wastewater per day, reducing the need to draw water from the Memphis Sand Aquifer for industrial uses.

MLGW President and CEO Doug McGowen said construction cannot restart immediately because the project's original engineering team is no longer involved, requiring a new design team to be assembled. City officials expect xAI to provide a formal construction timeline during an upcoming city council discussion.

Environmental advocates welcomed the renewed commitment but emphasized the need for enforceable deadlines. Protect Our Aquifer Executive Director Sarah Houston said the recycling facility remains critical to limiting industrial withdrawals from the region's groundwater supply.

The project reflects a growing trend of pairing wastewater reuse with data center and industrial cooling demands, creating alternative water supplies while reducing pressure on potable water resources. Once completed, the facility could serve both xAI's computing operations and other industrial users in the area, including nearby power generation facilities.