Campaigners have formally launched a lawsuit against Elon Musk’s xAI, claiming gas turbines at its data center in South Memphis are being operated illegally.

Civil rights organization the NAACP has made a complaint against xAI, and its subsidiary MZX Tech, alleging that 27 methane gas turbines that power the company’s Colossus 2 data center are being run in violation of the Clean Air Act.

xAI has been operating data centers in Memphis and the surrounding area since 2024, using gas turbines to power the facilities.

“The company’s failure to get a permit for its power plant - which is located near homes, schools, and churches - creates added health risks for families in North Mississippi and Memphis and is a clear violation of the Clean Air Act, which requires major sources of pollution to obtain air permits before being constructed or operated,” a statement from NAACP said.

“A data center should not be a potential death sentence for a community’s health. By looking to evade clear air laws to operate dirty turbines that emit pollution and known carcinogens, these companies are following a shameful, familiar pattern: asking black and frontline communities to bear the toxic brunt of ‘innovation’,” said Abre Conner, NAACP director of environmental and climate justice.

“As we shared since xAI started operating in Memphis, our homes, churches, and playgrounds will not be sacrifice zones for Big Tech's convenience. The NAACP stands firm that true progress cannot be built by ignoring community health and our environment. Our right to clean air is not up for negotiation, especially when companies prove expediency, not people, is their priority.”

The NAACP claims xAI’s power plant in Southaven has the potential to emit more than 1,700 tons of polluting nitrogen oxides (NOx) each year. The turbines also have the potential to release up to 180 tons of fine particulate matter, 500 tons of carbon monoxide, and 19 tons of formaldehyde—a toxic, cancer-causing chemical—each year.

The Southern Environmental Law Center and Earthjustice are representing the NAACP in the case.

“xAI’s continued operation of these turbines without a permit and without adequate pollution controls is not only illegal, it’s an insult to families living nearby who for months have expressed serious concerns about how air pollution from the company’s personal power plant could impact their health and well-being,” SELC senior attorney Ben Grillot said. “xAI must be held accountable for its reckless, unlawful actions - and that’s exactly what this lawsuit aims to do.”

News of the lawsuit, which will be heard in the district court of Northern Mississippi, first emerged in February.

xAI uses its data centers in Tennessee and Mississippi to power its Grok AI chatbot. The company came to Memphis in 2024, launching its Colossus supercomputer in a new data center housed in a former Electrolux factory in Memphis’s Boxtown district.

It purchased the site for Colossus 2 last March, and the data center came online in January. Despite Musk claiming it offered 1GW of capacity at launch, satellite imagery taken in January reportedly showed it had cooling equipment installed capable of managing 350MW.

A third data center is in the works, located in Southaven, across the state border in Mississippi, and the company is also spending $659m on another building to be constructed on an adjacent land parcel. Musk says his company, which is now part of SpaceX, will eventually have access to 2GW of compute power from the cluster, and gas turbines will be key to supplying this.

In March, it received permission to install 41 new turbines to power its data centers.

News of the lawsuit comes a week after it was reported that work on a water recycling plant in Memphis, being constructed by xAI, has ceased. The company had heralded the $80 million project as a key community benefit for the city, claiming the facility would clean up dirty water for use in xAI’s data centers, as well as other businesses.

But local news outlet the Daily Memphian reported that work on the project is currently on "indefinite pause", with staff redirected to other sites. In response, Musk posted on his social media network X, stating: “We need to focus on finishing Colossus 2 and ensuring it is extremely stable, then we will build the water recycling plant.”

DCD has contacted xAI for comment on the lawsuit.