A lawsuit alleging SpaceX-owned xAI illegally installed gas turbines to power a Memphis data center near Black communities will proceed after a federal judge refused the company’s bid to dismiss the case last week.
The judge recently rejected an effort by the Trump administration to undermine the case as well.
In rejecting xAI’s motion to dismiss, U.S. District Judge Debra M. Brown affirmed that the National Association for the Advancement of Colored People (NAACP) has standing to sue to protect its members who live, pray and go to school near the company’s Colossus gas power plant and might inhale its harmful emissions.
She also rejected xAI’s claim that at least 27 gas turbines installed at the site did not need permits under Mississippi’s implementation plan for the Clean Air Act, which exempts “mobile sources” of emissions. While the turbines were mounted to flatbed trailers, the law typically refers to self-propelled motor vehicles when referring to “mobile sources.”
“Because the plant is not a ‘mobile source’ according to the federal regulations … the plant was not (and is not) exempted from permitting requirements,” the Obama-appointed judge wrote in the Oct. 30 order.
xAI’s position has received the support of the Trump administration, which has broadly championed artificial intelligence investments that it claims are key for maintaining a competitive economic edge with China.
The Trump administration argued that by intervening in the case, it gained the right to dismiss it since the federal government typically has enforcement power under the Clean Air Act.
Brown rejected that argument, finding “there is no ‘fairly possible’ interpretation of the Clean Air Act that would give the United States the right to unilaterally dismiss a citizen suit once it intervenes in such suit.”
The NAACP’s lawsuit was filed in April and alleged that xAI — a company owned by Elon Musk’s SpaceX, and which powers the Grok AI assistant — “repeatedly” built gas power plants in the Memphis area without adequate Clean Air Act permits, in order to run data centers in or near Black neighborhoods.
The NAACP specifically alleged that xAI “tried to outrun the Clean Air Act” without obtaining mandatory permits, despite concerns that the power plants would emit “significant amounts of dangerous pollutants” that are harmful to human health.
Reuters later reported that xAI had installed 59 unpermitted natural gas turbines in total to power the Colossus 2 data center.
x.AI didn’t immediatley respond to a request for comment submitted by Landmark. The company claims on its Memphis website that it is “doing this right,” and working with local elected officials and agencies on the project.