Elon Musk and xAI logo.
Vincent Filley | AFP | Getty Images
Elon Musk’s xAI scored a victory in Mississippi, with regulators on Tuesday giving the go-ahead for the artificial intelligence company to build a power plant with 41 natural gas-burning turbines in the town of South Haven to power a nearby data center.
The Mississippi Department of Environmental Quality “voted to approve the permit” for xAI subsidiary MZX Tech LLC “after careful consideration of all public comments and community concerns,” MDEQ spokesperson Jan Schaefer told CNBC in an email.
The NAACP and other civil rights and environmental activists called for the meeting to be postponed, saying it conflicted with efforts by some residents to vote in the state’s primary election on the same day.
“We are outraged that despite community members’ clear demands for changes to Election Day hearings, MDEQ has chosen to force a decision that silences the very people most affected,” Abre Connor, the NAACP environmental and climate justice director, said in a statement from her organization and the Southern Environmental Law Center.
xAI, whose merger was announced in February and is now owned by SpaceX, has been using more than a dozen temporary turbines at its South Haven facility for months, claiming it does not need federal permits. The company has two data centers, Colossus 1 and Colossus 2, located across the Mississippi state line in Memphis, Tennessee.
Employees at Elon Musk’s xAI facility, which houses a large supercomputer known as Colossus used for artificial intelligence data processing, in Memphis, Tennessee, on September 11, 2025.
Karen Palfer Vogt | Reuters
As Musk pursues a potential mega-IPO for SpaceX, which would value the combined company at $1.25 trillion, he hopes it will provide Memphis and the surrounding area with the power and resources needed to build out the combined company’s AI infrastructure.
In addition to efforts to build a power plant in Southaven, xAI also plans to build another large data center called Macrohardrr in a warehouse that was previously a GXO logistics facility. Southaven and Memphis residents have been protesting xAI’s plans and operations for months, citing existing and projected air and noise pollution.
“The permits issued by MDEQ contain numerous serious deficiencies that violate federal law, violate MDEQ’s own policies, and endanger families in North Mississippi and Memphis,” the NAACP and SELC said in a joint statement Tuesday.
XAI did not respond to requests for comment. “The draft permit meets all legal and technical requirements necessary for issuance,” MDEQ’s Schaefer said in an email.
The NAACP, represented by SELC, plans to sue xAI over its past and ongoing use of natural gas-burning turbines without federal authorization.
Opponents claim that xAI underestimated the amount of pollutants emitted by the turbines in its permit application, with particular concerns about smog-forming nitrogen oxides and other pollutants that can harm human health, such as formaldehyde and suspended particulate matter.
They also allege that xAI failed to participate in community meetings or conduct proper environmental reviews while shirking its responsibility to comply with federal air quality regulations.
Jason Haley, a Southaven resident who watched Tuesday’s vote, told CNBC he was disappointed by the results, even though they were expected. Haley said he is bothered by the noise from xAI’s turbines and is part of a local coalition called Safe & Sound that is lobbying local politicians to require xAI to control noise levels.
Training and running AI models like Grok, developed by xAI, require large amounts of compute and power, and rising utility costs are contributing to the high power consumption of new data centers. At a meeting with the White House last week, executives from technology companies, including xAI, signed non-binding commitments to provide power to their facilities.
SELC senior attorney Patrick Anderson said in a statement Tuesday that the regulator supports Musk’s business ambitions despite concerns from local residents.
“Mississippi regulators appear more interested in fast-tracking xAI’s private power plants than thoroughly investigating their impacts and engaging meaningfully with the families who will be forced to endure this dirty facility and its pollution in their communities,” Anderson said.
Correction: This article has been updated to reflect that Abre Connor, the NAACP’s director of environmental and climate justice, is a woman. A previous version of this article misidentified her gender.
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