Nicholas Cocobris | Null Photo | Getty Images
and space x‘s stock has soared in its first three days of trading, but Elon Musk’s company has received backing from the Justice Department, which has asked a federal court in Mississippi to allow the NAACP to file a lawsuit against the company.
The lawsuit, filed in April by the NAACP, alleges that xAI, Musk’s artificial intelligence lab now owned by SpaceX, violated the federal Clean Air Act by using dozens of methane gas-burning turbines to power its AI data centers without proper permits or pollution controls. Turbines emit pollutants and particulate matter that form smog and can cause increased health risks and unpleasant odors.
The NAACP recently asked a court to issue an injunction preventing xAI from using the turbines until a judge makes a decision.
SpaceX’s Colossus 1 and Colossus 2 data centers and their associated power plants in and around Memphis, Tennessee, have faced protests for more than a year over issues including air pollution, electricity and water consumption, and noise surrounding the facilities.
In a complaint filed June 15 by the Department of Justice’s Environmental and Natural Resources Division, the agency’s lawyers accused the NAACP of threatening “the national, economic, and energy security of the United States by seeking to cut off power supplies for artificial intelligence innovations in support of the Department of the Army’s military operations.”
Before merging with SpaceX in February, xAI partnered with OpenAI, Anthropic, and google.
Cameron Stanley, head of the Pentagon’s AI division, was quoted in a Justice Department filing as saying that the continued use of Grok is “of paramount national security importance.”
The Department of Justice said that during the Iran War, xAI’s military version of Grok “enabled the U.S. military to deploy more than 2,000 rounds of munitions to 2,000 different targets within 96 hours, evidence that the Grok Gov model significantly improved operational efficiency.”
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
“The Department of Justice wants to give itself a veto over citizen litigation, an important legal tool that has been used to protect communities from illegal pollution for more than 50 years,” Earth Justice, one of the law firms representing the NAACP, told CNBC in an emailed statement.
The Southern Environmental Law Center, co-counsel in the case, characterized the Justice Department’s interference motion as a “massive power grab” by the Trump administration. “At a time when the ultra-wealthy appear to be protected and supported by some government agencies, it is important to ensure that polluting industries do not profit at the expense of the health of Black communities,” Abre Connor, director of environmental and climate justice at the NAACP, said in an email.
SpaceX did not respond to a request for comment.
Residents living near the xAI facility in South Haven, Mississippi, a suburb of Memphis, filed a separate class action lawsuit earlier this month alleging they are exposed to “nearly constant noise, vibration, and other nuisance levels” from the company’s power plants.
SpaceX made its long-awaited Nasdaq debut on Friday, with a market capitalization of more than $2 trillion. The stock continued to rise this week, reaching a valuation of more than $2.8 trillion on Tuesday. Amazon.
The xAI data center was built to further Musk’s ambitions in AI, but SpaceX is currently leasing its computing power to Anthropic and Google.
Gallup released a poll in May that found that seven in 10 Americans oppose building local AI data centers, including nearly half, 48%, who strongly oppose it.
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