Elon Musk and xAI logo.
Vincent Filley | AFP | Getty Images
Elon Musk’s xAI, now owned by SpaceX, is facing a new legal challenge from environmental groups in Mississippi. In Mississippi, the company plans to build a large-scale methane gas-fired power plant in the town of South Haven.
Nonprofit groups including the NAACP, Young Gifted and Green, and the Safe and Sound Coalition are calling for Mississippi to revoke the permit that state environmental regulators granted last month to xAI to build the plant. Members of the group live close to xAI’s local operations.
The group’s lawyers wrote in a petition filed with the state Thursday that it would “exacerbate the region’s ongoing ozone problem” and result in “significant increases in pollutants such as nitrogen dioxide and related particulate matter,” impairing air quality and threatening residents’ health.
Musk’s company received a permit from the Mississippi Department of Environmental Quality on March 10th, allowing it to permanently install 41 natural gas-burning turbines in DeSoto County, Mississippi, to power a nearby data center.
XAI currently operates a data center called Colossus 2 across the state line in Memphis, Tennessee, and is building a new facility called Macrohardrrr in Southaven.
Mr. Musk, the world’s richest man, owns OpenAI, Anthropic, and google In the rapidly growing AI market. SpaceX acquired xAI in February, valuing the combined company at $1.25 trillion, ahead of what is expected to be a record IPO in the coming months.
Communities across the United States are increasingly concerned about the financial and environmental risks associated with building power-intensive infrastructure to support AI models and the apps and services that run on them.
Opponents of xAI’s development, represented by the Southern Environmental Law Center, through its local subsidiary MZX Tech LLC, argue that xAI and state regulators are not using accurate pollution estimates when considering the power plant.
It also said xAI was not required to use the cleanest turbines possible or purchase environmental offsets and that local stakeholders were excluded from key meetings, while government emails revealed regulators were rushing the process under pressure from xAI.
The clearance xAI received is known as the Prevention of Significant Deterioration (PSD) clearance. This is a federal air quality standard that applies to significant sources of pollution, such as utility-scale power plants. Such permits are typically granted after years of back and forth between the Environmental Protection Agency, state regulators and the public.
Representatives for xAI did not respond to requests for comment. MDEQ told CNBC in an email on Friday that it had received the group’s “request for an evidentiary hearing regarding authorization” and that xAI would have the opportunity to participate as a party in the proceeding.
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