Musk’s xAI draws more opposition over Mississippi power plant permit

Elon Musk’s xAI, now owned by SpaceX, is facing a new legal challenge from environmental groups in Mississippi, where the company plans to build a massive methane-burning power plant in the town of Southaven.

Including non-profit organizations NAACP, Young, Talented and Environmentally FriendlyAnd Safe and Sound Coalition We want Mississippi to revoke the permit the state’s environmental regulator issued last month that allowed xAI to build the facility. Members of the groups live near xAI’s local operations.

In a petition submitted to the state on Thursday, the group’s lawyers wrote that the plant would “further exacerbate the ongoing ozone problem in the region” and lead to “significant increases in pollutants such as nitrogen dioxide and associated fine particulate matter” that would harm air quality and threaten the health of residents.

Musk’s company received a permit from the Mississippi Department of Environmental Quality on March 10, allowing it to permanently install 41 natural gas-burning turbines in DeSoto County, Mississippi, to power nearby data centers.

XAI currently operates a data center called Colossus 2 just across the state line in Memphis, Tennessee, and is building a new facility in Southaven called Macrohardrrrr.

Musk, the richest person in the world, OpenAI, Anthropic and Google in the emerging artificial intelligence market. SpaceX acquired xAI in February in a transaction that valued the combined asset at $1.25 trillion, ahead of what is expected to be a record IPO in the coming months.

Communities across the US have become increasingly concerned about the financial and environmental risks associated with building the power-intensive infrastructure that supports AI models and the applications and services that run on top of them.

Groups opposing xAI’s development, represented by the Southern Environmental Law Center, argue that the company and the state’s regulator, through its local subsidiary MZX Tech LLC, did not use accurate pollution estimates when evaluating the power plant.

They also say xAI was not required to use the cleanest turbines possible or buy environmental offsets and that local stakeholders were excluded from key meetings, while government emails reveal the regulator rushed the process under pressure from xAI.

The authorization xAI received is known as a Prevention of Significant Disturbance (PSD) clearance; A federal air quality standard that applies to major pollution sources such as utility-sized power plants. Such permits are usually issued after years of correspondence between the Environmental Protection Agency, state regulators and the public.

XAI representatives did not respond to a request for comment. MDEQ told CNBC via email on Friday that it had received the groups’ “request for an evidentiary hearing regarding the permit” and that xAI would have the opportunity to join the case as a party.

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