Work stopped in April after xAI had broken ground in October, secured permits and spent millions, with Elon Musk saying resources were being redirected to finish the Colossus 2 data centre.
Memphis utility chief Doug McGowen said xAI had expected the plant to cost about $80 million, versus an estimated $200 million, while Mayor Paul Young said the company still pledged to complete it.
The pause comes as parent SpaceX prepares for a summer IPO, amid lawsuits and a congressional probe over xAI's Memphis operations, and has intensified criticism that promised water conservation remains optional.
Is xAI's paused water plant a casualty of SpaceX's IPO, or a delay for its massive AI supercomputer?
Are AI data centers, with huge water use and pollution lawsuits, becoming a new environmental crisis for local communities?