MEMPHIS, Tenn. — Memphis City Council on Tuesday approved selling land to xAI to build a water recycling facility that will cool its Colossus supercomputer and two nearby industries.

xAI will buy 13 acres of city-owned land near its southwest Memphis site for $820,000, then build an $80 million facility to recycle wastewater from a nearby water treatment plant.

“We think this is a really good deal for the community,” Mayor Paul Young said. “As we think about our environment, there is nothing more precious than our water.”

The city paid $200,000 for the entire 65 acres, Young said, and will sell 13 acres to xAI for $820,000. Young says the company is paying more than the land’s value — about 4 times more, an xAI representative said.

The water also would be used for cooling by a TVA power plant and Nucor Steel.

Brent Mayo with xAI said the company could build the water facility on land it already owns but wanted to go through the public process.

“I personally want to work with city council, so I will do everything in my power to get it pushed through so that we can do what’s good, and right, for the city of Memphis. Not to be confused with West Tennessee, which everybody seemingly in the state alludes to West Tennessee. This is Memphis. I want Memphis to win,” Mayo said.

The land sale received support from local advocacy group Protect Our Aquifer, because it would allow TVA to stop using aquifer water for its plant.

The graywater recycling facility, which could go online as soon as next summer, would reduce the draw on the Memphis Sand aquifer by about 9%, and produce no pollution while reducing wastewater discharged in the Mississippi River, engineers said.

It would be the largest facility of its kind in the world.

The sale agreement would allow the city to buy back the land for $1 if xAI does not make significant progress on the facility.

“It’s really critically important for us to be sustainable in everything we do. This is a big deal for us and a big deal for the community,” Mayo said.