Elon Musk's artificial intelligence venture xAI is under fire for alleged covert interactions with government officials in Memphis, Tennessee, regarding the construction of a supercomputer.

What Happened: According to a report, xAI conducted a secret meeting with local and national law enforcement agencies six months ago, prior to the public or city councilors being informed about the construction of "the world's largest supercomputer" in the area.

The meeting entailed signing non-disclosure agreements (NDAs) with CTC Property, a shell company overseen by Musk's personal banker, Jared Birchall, reports Forbes.

Forbes was the first to reveal that government officials had signed NDAs with xAI, forbidding them from discussing the "Colossus" project. The agreement and other internal documents were procured through a series of public records requests.

Scott Banbury, conservation director of the Sierra Club Tennessee Chapter, denounced the move as "unethical," contending that government agencies should primarily be accountable to the citizens of Memphis.

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"Colossus" was assembled in just four months in a vacant factory along the Mississippi River. It was officially online a month after the Chamber publicly announced in June that xAI would be establishing its "new home" in Memphis.

However, xAI's expansion into Memphis has been accompanied by aggressive demands on local resources.

The data center has requested enough power to run 100,000 households and will draw more than 1 million gallons of water daily from the Memphis Aquifer for cooling its servers.

Despite the secrecy surrounding the project, xAI has reportedly declined to engage with the Memphis community. The company's reluctance to share information about the project has sparked concerns among residents and environmental justice groups.

Why It Matters: This incident underscores the ongoing debate about the ethical implications of tech companies' dealings with government entities.

The secrecy surrounding xAI's project and the company's refusal to engage with the local community has raised questions about transparency and accountability in the tech sector.

Furthermore, the project's significant demand on local resources highlights the environmental impact of such large-scale tech projects.

This incident serves as a reminder of the need for tech companies to balance innovation with social responsibility.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.