[DigitalToday reporter Jinju Hong (홍진주)] It has been confirmed that Elon Musk has acquired mobile power equipment company APR Energy to secure data centre power for xAI, an artificial intelligence (AI) company. The move aims to source power internally for operating the AI service Grok. It is also expected to amplify controversy over expanding fossil-fuel power generation.

Electrek, an electric vehicle outlet, reported on July 14 local time that the deal was confirmed through a U.S. Federal Trade Commission (FTC) notice ending its early termination of merger review. With the early termination decision, the acquisition was approved without additional antitrust review.

The deal value was not disclosed, but the industry is estimating the company’s value at more than $1 billion based on a filing showing a 5 percent APR Energy shareholder received about $50.4 million. Fortress Investment Group is reported to have acquired APR assets late last year, established New APR Energy LLC, and then sold it to Musk’s side.

APR Energy is not a typical power plant operator but a specialist in mobile generation equipment. It supplies gas turbines and diesel and natural gas engines that can be transported on trailers. Unlike fixed power plants that can take years to build after installing generators, it can start operating within days. The equipment can reach maximum output in about 10 minutes, and total generation capacity is said to exceed 1 GW.

With the acquisition, Musk has secured a foundation to supply power directly by deploying mobile generators near AI data centres without waiting for grid connection procedures.

This approach is also said to have already been used at xAI’s AI supercomputer Colossus in Memphis, Tennessee. Colossus, used for training Grok and running the service, and the follow-on system Colossus 2 have relied significantly on gas turbine generation.

The process has also sparked environmental controversy. The U.S. Justice Department intervened last month, defining xAI’s operation of power equipment in the South Memphis area as an issue related to national, economic and energy security. Earlier, the National Association for the Advancement of Colored People (NAACP) and environmental groups filed a Clean Air Act lawsuit, alleging xAI installed up to 35 gas turbines without permits and did not properly equip pollution-control devices.

Environmental groups claim the power equipment could emit more than 2,000 tonnes of nitrogen oxides (NOx) a year. xAI officials have also said they plan to apply the current mobile turbine operating method as it is to Colossus 2 to be built in the future.

The acquisition also contrasts with Musk’s environmentally friendly energy strategy he has emphasised. He said early this year that Tesla and SpaceX would build 100 GW of annual solar manufacturing capacity in the United States, but for AI data centre power he chose gas and diesel-based generation equipment instead of solar and energy storage systems (ESS).

This has led to analysis that massive power demand in the AI era is making practical power procurement a higher priority than a green transition. Musk has previously criticised fossil fuels as "the dumbest experiment in history," but he is now being criticised for increasing reliance on gas power to expand AI infrastructure.

Meanwhile, xAI has recently been embroiled in controversy over Grok’s adult conversation function, AI companion service and image generation functions. As concerns have been raised that some functions could be used to create inappropriate content, calls to strengthen safety measures are also growing.

The market views the APR Energy acquisition as a strategic investment by xAI to secure data centre power. How Musk deploys the mobile generation equipment he has secured and how he meets environmental regulations and permitting procedures are expected to become new issues.