The Briefing

Thanks for reading The Briefing, our nightly column where we break down the day’s news. If you like what you see, I encourage you to subscribe to our reporting here.

Greetings! It’s Theo.

In my hometown of Memphis, Tenn., Elon Musk’s xAI is a big topic of conversation for the second holiday season in a row thanks to the two gigantic data centers the company has opened here. The multibillion-dollar facilities have sparked a lot of local opposition because they’re being powered by gas generators that emit air pollution.

In response, xAI has ramped up efforts to convince Memphians it’s a good neighbor. This year, the company became the lead sponsor of a long-running Christmas light show at a local park, now dubbed “Starry Nights presented by xAI.”

Call me a Grinch, but I don’t believe that xAI is paying for the lights purely out of holiday spirit. The company has concentrated its AI infrastructure in Memphis, and the political winds may be turning against it. While most local elected officials are supportive of xAI, citing tax revenue and jobs, the mayor of the county that includes Memphis is up for election in 2026 and has real power over how the company can operate and expand its data centers. The congressman representing most of Memphis, who supported xAI when the first data center was announced in 2024, is now facing a serious primary challenge from a young progressive who built a name for himself by leading protests against Musk.

I first found out about xAI’s sponsorship of the light show from angry social media posts by Memphians, some of whom were calling for a boycott. And while my hometown may be an extreme example, the backlash to AI and data centers is poised to be a significant force in the midterm elections next year, as my colleague Sylvia Varnham O’Regan has reported.

That brings me to the obsession Musk and other AI CEOs have developed this year with putting data centers in space, which I think only make sense as a hedge against opposition to their existence on Earth.

I’ve seen some people dismiss Musk’s recent talk of building data centers in space as an unserious effort to give another one of his companies, SpaceX, an AI sheen ahead of a potential public offering in 2026. The economics of building data centers in orbit are ludicrous, skeptics say, because they’re already so complicated and expensive to build on Earth. Those doubters may be right about the engineering and financial challenges of data centers in space, but they’re overlooking the politics.

If you think there’s a chance that political opposition could eventually make it impossible to build data centers on Earth, leaving the planet suddenly becomes a lot more appealing. In space, you don’t have to sponsor Christmas light shows to win over the locals.

In Other News

• The Trump family’s stablecoin will pay investors a 20% yield, which Donald Trump Jr. called a “massive holiday campaign.” The offering on Binance is already attracting investors.

• Snowflake is in talks to buy app monitoring startup Observe Inc. for around $1 billion, which would likely be the biggest deal in Snowflake’s history, according to people with knowledge of the discussions.

• Private equity firms sold $3.5 billion of general partner stakes through the end of October, on pace to set a record. The fundraising helps PE firms as they grapple with dry spells of portfolio company sales and public offerings.