Elon Musk spent estimated $1 billion on an energy company to power xAI, filings reveal — APR Energy owns a fleet of trailer-mounted gas and diesel turbines capable of generating more than 1 gigawatt
Elon Musk’s Colossus 1 and 2 data centers are in hot water for allegedly using unpermitted mobile natural gas turbines to generate the power they need. But even though he also owns a solar power generation and large-scale battery storage business through Tesla Energy, Electrek reports that he instead doubled down on mobile generators after purchasing APR Energy. It’s not exactly known how much Musk paid for the company, but disclosures revealed that he spent more than $50 million on the 5% stake held by a minority shareholder. This meant that he likely poured at least a billion dollars into the entire firm if every shareholder received the same amount.
Deals of this magnitude often come with press releases, but it was only made public because of a Federal Trade Commission (FTC) early termination notice that approved it without requiring further review. It’s unclear why Musk did not publicize it, but SpaceXAI is currently facing allegations that its data centers in Memphis, Tennessee, are generating massive amounts of pollution that mostly affect nearby black communities. It makes financial sense for Musk to acquire APR Energy, especially if he’s spending millions of dollars renting these generators. However, he’s also trying to win over his data centers’ neighbors, like giving a 50% discount on all residential Starlink plans in Memphis and Southaven, and news like this would certainly undermine his efforts.
It’s understandable why SpaceXAI wants to continue using these mobile turbine generators instead of connecting directly to the grid. The massive amounts of power that these data centers demand, with Musk aiming for a 1-gigawatt capacity, means that the infrastructure behind that must be upgraded. It would also take months, if not years, before his sites could get approved to connect to the grid. Aside from having to go through several regulatory hoops, it would also likely face stiff resistance from the community who is afraid of experiencing the same “irreversible” 76% price spike that PJM imposed that’s being blamed on data centers.
But even without a fixed powerplant (which Musk is reportedly importing), SpaceXAI is already facing opposition from the community. The residents surrounding the sites have already filed a lawsuit against SpaceXAI and Elon Musk, but it will likely be an uphill battle, especially as the Department of Justice (DOJ) has weighed in, saying that Colossus 2 “supports mission-critical operations” for national security. We still don’t know what will happen to Elon Musk’s turbines, especially as the hearings are yet to take place; but in the meantime, nearby residents have no choice but to accept the alleged additional risk and pollution that these mobile generators bring.
