Elon Musk’s artificial intelligence firm xAI is facing legal action over air pollution from the gas-fired turbines it uses to power its Memphis computer farm. 

Musk’s AI firm xAI received a 60-day notice of intent to sue for violations of the Clean Air Act on Tuesday from the Southern Environmental Law Center (SELC) over its “Colossus” AI datacenter in Memphis, Tennessee.

The potential lawsuit, on behalf of the oldest civil rights group in America, the National Association for the Advancement of Colored People, centers on dozens of natural gas turbines that the firm installed to power the facility instead of waiting for a grid connection.

According to SELC, these turbines are operating without proper air quality permits and are emitting harmful pollutants, including nitrogen oxides and formaldehyde, violating the Clean Air Act.

“Over the past year, xAI has installed and operated at least 35 combustion turbines and other sources of air pollution at the Colossus site without ever obtaining the necessary preconstruction or operating air permits,” the notice reads.

Formal requests ignored

The notice also claimed that xAI failed to implement “Best Available Control Technology,” such as selective catalytic reduction to limit emissions, another Clean Air Act requirement for major sources.

Related: Amazon to invest $13B in Australian AI data center infrastructure

“We have on four different occasions sent formal requests to the local health department asking for them to use their authority to enforce the law,” SELC senior attorney Patrick Anderson told Newsweek, adding, “Obviously, that hasn’t happened.”

Bad air quality lingers, civil rights group says

The Colossus datacenter is located at a former electronic manufacturing facility in South Memphis near a predominantly Black community called Boxtown, where air quality in the area is already diminished by other industrial emissions.

“We are prepared to combat environmental racism at every turn,” the NAACP said on X. 

The civil rights organization seeks injunctive relief, civil penalties, fees, and litigation costs. 

Cointelegraph contacted xAI and the NAACP for further comments but did not receive an immediate response. 

Data center demand surging

Musk’s xAI is building a second, larger facility called Colossus 2 in Memphis, requiring at least 1 gigawatt of power.

Data center demand is rapidly increasing, driven largely by the growth of cloud computing and AI, with the US Department of Energy projecting that it could double or triple by 2028. 

By 2030, data centers will need $6.7 trillion in global investments to meet the surging demand, research firm McKinsey reported in May.

“AI’s record-shattering demand is finding limitations in the supply of data centers and electricity as AI companies struggle to reach profitability amid mounting costs. Institutions estimate AI will drive a 165% increase in the demand for data centers by 2030,” Nick Ruck, director at LVRG Research, told Cointelegraph. 

Amazon recently signed a deal with Talen Energy for nuclear energy to power its AI data centers in Pennsylvania through the year 2042. It also signalled plans to invest more than $13 billion in Australia’s AI and cloud infrastructure. 

Magazine: AI is good for employment says PWC — Ignore the AI doomers: AI Eye

Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk’s Crypto Daybook Americas.

Telegram’s blockbuster deal with xAI, which would see Elon Musk’s AI company integrate into Telegram and the two firms share revenue, is still a work in progress despite an announcement from Pavel Durov earlier Wednesday, U.S. time, that the deal was inked.

TON, a token affiliated with Telegram’s ecosystem, is trading at $3.30, rallying there from $3 after the initial – now refuted – announcement of the partnership was made. The token is down from an earlier high of $3.68, after Elon Musk posted on X that no deal had been signed between the two companies. TON is still up 11% on the day, according to CoinDesk market data.

While Durov has now confirmed that no deal has been signed, the Telegram founder said there is an “agreement in principle” which might be why TON still has significant support at the $3.30.

All eyes will be on Telegram and xAI as the Asia business day begins to see if more clarification comes from either side.

Decentralized BlueSky isn’t a Web3 Company, Says CEO

VANCOUVER—Jay Graber, the CEO of fast-growing decentralized social media platform Bluesky, got her start in Web3 as a developer for privacy coin zCash, but she wants to keep her X competitor firmly in Web2.

Speaking at Web Summit in Vancouver on Wednesday, Graber argued blockchain technology’s permanence and resource-intensive design make it unsuitable for consumer-oriented social networks, where content is fleeting and personal.

“Why do you need your picture of what you post for lunch being maintained forever in this digital archive?” she asked on stage, highlighting the inherent scalability and cost limitations that drove her decision to avoid blockchain at Bluesky.

Graber, to be sure, isn’t against crypto. She says there’s still genuine value in the technology for things like payments and digital identity, even if sometimes Web3 often presents solutions in search of a problem, and has a trend of gravitating towards centralization.

“There’s a period where everyone was creating blockchain like this hammer, and we were just going to try blockchain for everything,” Graber said. “Every system that’s trying to do it ends up with concentrations because it’s easy, and convenience ultimately wins at the end of the day.”

For her, Bluesky’s future lies in combining the ideals of decentralization, such as user autonomy and portability, with practical, Web2 infrastructure to create a platform that prioritizes users’ needs.

“Blockchain will probably find its place somewhere in the world of technology, but Bluesky is not on a blockchain because we’re just making the best choices for our users,” she concluded.

Nvidia’s Earnings Beat Boosts Stock, Offers Modest Lift to AI Tokens

Shares of Nvidia rose roughly 4% in after-hours trading Wednesday after reporting stronger-than-expected first-quarter earnings, highlighted by a 69% revenue increase from last year and a 73% jump in its data center business driven by robust demand for AI chips. Net income rose 26% to $18.8 billion, boosting Nvidia’s year-to-date performance modestly higher, CoinDesk previously reported.

The earnings report provided a slight lift to AI-related crypto tokens like Bittensor (TAO), NEAR Protocol, and Internet Computer (ICP), though gains were modest.

However, Nvidia tempered future expectations, cautioning that second-quarter revenue might fall short of market estimates due to tariff-related trade tensions between the U.S. and China.

Market Movements:

• BTC: Bitcoin dipped 1.2% to $107,800, though NYDIG sees more room for gains. At the same time, crypto markets shrugged off a U.S. court blocking Trump’s broad tariffs as unconstitutional, with BTC trading remaining muted.
• ETH: Ether is trading above $2700 as Asia begins its business day. Earlier, CoinDesk analyst Omkar Godbole wrote ETH is eying a breakout above $3,000, forming a bullish “ascending triangle” pattern with rising support and resistance at $2,735, as higher lows signal growing buying pressure and accumulation ahead of a potential price surge.
• Gold: Gold has slipped 1% to $3,267.47 amid cooling safe-haven demand, though tariff and geopolitical uncertainty linger.
• Nikkei 225: The Nikkei 225 is opening in the green, up 1%, as investors in export-reliant Japan are looking at a recent announcement that the Supreme Court has blocked Trump’s tariffs with cautious optimism, even as crypto shrugged it off.
• S&P 500: While the S&P 500 closed in the red, futures are up 1% as traders await more clarity regarding the court’s move to block Trump’s tariffs.

Have you ever wanted to receive tangible benefits from the games you already enjoy? With Proof-of-Skill on the Xai Blockchain, that possibility is becoming more accessible. Soon, you can link your Steam account, automatically create a blockchain wallet, and start accumulating $XAI tokens for in-game achievements.

Convincing major AAA game developers to adopt blockchain has been a long-standing challenge, often due to integration complexities. Proof-of-Skill attempts to address that challenge by adding Web3 functionality in a way that avoids overhauling the user experience. If you’re curious about how this process works—keep reading.

The Biggest Challenge in Web3 Gaming

Historically, large studios have hesitated to incorporate blockchain elements. They see potential friction for players and a lack of clear incentives for their existing communities.

Proof-of-Skill seeks to minimize these concerns. Rather than developers building token economies from scratch, the protocol ties blockchain-based rewards directly to Steam Achievements. You continue playing as usual, and the system tracks your progress behind the scenes.

Source Xai

The Opportunity: Steam’s Broad User Base

First, consider Steam, a platform with over 100 million monthly active users. With Xai Play, you link your SteamID to create a blockchain wallet via Xai Connect. From then on, Steam Achievements appear on-chain, enabling you to earn $XAI tokens.

Next, look at the potential network effect. When a protocol can support more than 40,000 Steam games, it opens doors to both Web3 and Web2 developers. By offering a structure where publishers can sponsor tournaments or distribute rewards, Xai hopes to become a sought-after platform for studios aiming to bolster player engagement.

What Is Proof-of-Skill?

At its core, Proof-of-Skill is a Solidity-based protocol operating on the Xai Blockchain. It introduces three primary features:

1. Tokenizing Steam Achievements – Important milestones can be converted into ownable blockchain assets.

2. Enabling Real-World Rewards – $XAI tokens are awarded for achievements, tournament success, or leaderboard standings.

3. Bridging Web2 and Web3 – Integrating mainstream gaming ecosystems with a blockchain-based rewards mechanism.

$XAI and Value Accrual

Now, let’s look at $XAI, the utility token within this ecosystem. The XAI Foundation plans to distribute tokens to recognize a variety of in-game actions, from milestone achievements to tournament victories. If the player base expands, publishers may purchase $XAI to fund events, creating broader demand for the token.

Then, those same publishers have an incentive to sponsor ongoing tournaments or highlight seasonal achievements, providing opportunities for you to earn more tokens.

The Three Pillars of the Ecosystem

1. Xai Play

• Integration: Link your Steam account swiftly, and any new (or past) achievements you earn are tracked automatically.

• Effortless UX: Even if you’re new to blockchain, the system manages wallet creation in the background.

• Social Interaction: Leaderboards, community competitions, and shared accomplishments aim to keep you engaged across diverse games.

2. Proof-of-Skill

• Achievement Processing: Steam Achievements are verified and turned into NFTs.

• Leaderboard Calculation: Achievements get weighted by factors like rarity, which can affect your $XAI rewards.

• Cross-Game Rewards: Achievements from multiple games can accumulate value, further motivating consistent participation.

3. Xai Blockchain

• High Scalability: Built to handle numerous transactions per second.

• Sponsored Fees: Users don’t shoulder direct gas fees, helping streamline gameplay.

• Security: The blockchain records ownership in a transparent, tamper-resistant manner.

Source Xai

Why Proof-of-Skill Differs from Other Chains

Now, you might wonder how Proof-of-Skill and Xai compare to existing options. Each platform has its merits, but Proof-of-Skill emphasizes a few points:

1. Game Variety: It has the potential to work with over 40,000 Steam titles, whereas other platforms often concentrate on a narrower range.

2. AAA-Level Access: Instead of centering on newly developed blockchain games, Proof-of-Skill can link to established, higher-profile titles.

3. Broad Adoption: By making use of Steam’s user base, Xai could encourage more immediate engagement with Web3 features.

4. Layer 3 Infrastructure: Xai is built to prioritize efficiency and scalability, which may facilitate smoother adoption compared to standard Layer 2 solutions.

What This Means for You as a Gamer

Imagine you log into your favourite shooter or RPG, hit an achievement milestone, and receive more than just a digital badge. Now, you could hold an asset that links directly to a token economy. You might be able to exchange or showcase that asset, or even gain access to specific events.

The next steps could include connecting your Steam account to Xai Play, looking over which achievements have higher reward potential, and deciding if you want to join community tournaments. At a basic level, you don’t have to alter your routine—simply play as you normally would. The added blockchain elements operate in the background, letting you focus on gameplay.

Gaming Rewards with a Balanced Approach

Unlike the older “play-to-earn” concepts that sometimes struggled to remain viable, Proof-of-Skill relies on recognizing genuine in-game accomplishments. By focusing on established titles and achievements, it attempts to integrate rewards into a framework that already resonates with many players.

• Skill-Based, Not Pay-to-Win: Player performance influences their rewards.

• Straightforward Onboarding: Automated wallet creation simplifies the jump to blockchain.

• Potential for Steady Rewards: Regular tournaments and special achievement programs may keep the ecosystem active.

Moving Beyond Web3 Norms?

Proof-of-Skill presents a moderate path forward for Web3 gaming: it doesn’t discard existing Steam communities or require developers to drastically change their game economies. Instead, it attaches tokens to achievements that already exist.

For that reason, Proof-of-Skill has the potential to introduce more people to blockchain in a way that feels less forced. Whether it fully delivers depends on consistent effort from the developers, publishers, and player community alike. Ultimately, the model is designed to reward gamers in a fair and engaging way—particularly those who appreciate recognition for skillful play.