On the banks of the Mississippi, a sulfurous stench hits the back of the throat near Elon Musk’s Colossus, the largest artificial intelligence supercomputer in the world.

Housed in a warehouse guarded by CCTV cameras and an imposing fence, with a row of Tesla cybertrucks parked outside, Colossus is named after a 1970 dystopian film about a computer that seizes control of the United States nuclear codes and enslaves humanity.

Inside, hundreds of thousands of processing units, the systems used to power AI, are whirring away on neatly stacked shelves to produce Grok, a chatbot which Musk hopes will soon overtake ChatGPT as the most advanced large language model.

Early versions of Grok have had troubling issues, parroting racist language from social media and praising Adolf Hitler. The chatbot’s successes include the creation of an anime-style girlfriend named Ani, designed to chat to lonely men.

When completed, Colossus will require 1.1 gigawatts of power, about 40 per cent of the energy consumption of Memphis on an average summer’s day. It will pump one million gallons of water, equivalent to one and a half Olympic-sized swimming pools, to cool its processors each day.

Elon Musk has planned a second AI supercomputer to be built about 6 miles to the west of the current Colossus

BRENDAN SMIALOWSKI/AFP/GETTY IMAGES

Although these statistics seem extraordinary, what is happening in south Memphis is a vision of America’s economic future.

Despite fears of a 2008-style financial crash, investors are pouring hundreds of billions of dollars into AI, and big tech tycoons are competing to build data centres at a frenetic pace across the country.

It was after the release of ChatGPT in 2022 that Musk, 54, realised the OpenAI chief executive, Sam Altman, his former friend turned competitor, had stolen a march in the AI race.

• Does the world really want what Sam Altman is selling?

Desperate to catch up, Musk created xAI and looked for a city in need of investment. He chose Memphis, whose authorities were willing to waive planning regulations to help him build his supercomputer. In just 122 days he turned a former appliance factory into Colossus.

The site of Colossus

KAREN PULFER FOCHT FOR THE TIMES

In Boxtown, a 90 per cent black neighbourhood first settled by freed slaves in 1863, residents believe the fumes from Colossus, about a mile away, have made a polluted suburb even more noxious.

The surrounding forest has turned shades of saffron and pumpkin, yet these days Sarah Gladney, 71, seldom opens her windows and she has given up on her daily constitutionals.

“Prior to xAI, we were dealing with more of a waste smell. Like poop,” Gladney, a retired postal worker, said. “This is more like a chemical-type smell.”

Sarah Gladney asked Grok when xAI would invest in the community

KAREN PULFER FOCHT FOR THE TIMES

• Louisa Clarence-Smith: Americans are fighting back against data centres and Big Tech

Each question posed to an AI chatbot such as Grok requires far more power than an ordinary Google search — possibly up to ten times more.

When the Memphis grid was unable to offer sufficient power for Colossus to churn out chatbot responses, Musk installed 35 methane gas turbines for his data centre.

While Shelby County has recorded the dirtiest air in Tennessee for many years — half the state’s admissions for childhood asthma come from there — local residents say the arrival of Colossus has made things worse.

Willie Joe Stratford at the home in which he was born. He blames pollution from Musk’s AI for his ailments

KAREN PULFER FOCHT FOR THE TIMES

Willie Joe Stafford, 81, a retired Boxtown resident who used to work in the city’s transport department, explained his conviction that the mucus he now regularly coughed up was a result of the xAI pollution in Boxtown. To illustrate the ill effects, he turned on his cold water tap to show a slow trickle falling into his sink, blaming the pathetic flow on the insatiable thirst of Colossus.

“The people who live round here are blacks,” Stratford said. “So they think they can do what they want. Why did Musk pick this area down here to put that computer thing that ain’t nobody down here need?”

Batsell Booker, 66, has a daughter who is recovering from cancer. Boxtown has abnormally high rates of the disease.

“We have to put our lungs up in exchange for profit. It’s just not fair, it’s not morally right. I’m all for technology. My grandson works in cybersecurity. My battle is over them bringing more pollution into a small already polluted black neighbourhood,” he said.

Musk has promised not to drain the city’s aquifer and has committed to building an $80 million wastewater plant, an investment that residents have long been campaigning for.

The hope is that Musk’s spending will spur further economic growth in a city with the second highest poverty rate in the US, even though no one is expecting Colossus to create many jobs.

“I think it was understood early on that this wasn’t going to be an operation that would be a large producer of jobs,” John Zeanah, the city’s chief of development and infrastructure, said. “My recollection is that it was somewhere between 200 and 300 that they were anticipating.”

The pace of the construction is unrelenting and a few miles inland from Colossus, just south of Elvis Presley’s Graceland, Musk is well under way with the construction of a larger data centre, Colossus 2.