Councilors voted 7-5 to postpone the decision, despite protests from more than 100 residents.
The pause, proposed by councilor JB Smiley Jr., would allow officials to assess data centers' social, health, and environmental impacts. Fox News Memphis reported that protesters chanted slogans as police cleared the council chamber, and a fight reportedly broke out outside the council offices with no arrests made.
Memphis hosts several facilities operated by Elon Musk's xAI, now rebranded as SpaceXAI, and the sites face lawsuits over alleged gas turbine permit violations. Some councilors warn a moratorium could divert investment elsewhere, and an xAI facility in neighboring Mississippi would remain unaffected.
Councilor Jeff Warren told WREG: "If we pass a moratorium, there's no reason for them to think they need to come here. They get the same benefit from going to DeSoto County, Crittenden County, Fayette County, Tipton County."