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Door staff@engadget.com (Jackson Chen) - 01 Nov 2026
A federal judge's latest ruling has denied xAI's request to dismiss a lawsuit that alleges its data center campus in Memphis, Tennessee is running turbines without proper permits and violating the Clean Air Act. The decision, from US District Judge Debra M. Brown, allows the lawsuit, which was filed by the NAACP, to move forward.
The organization filed its legal action against xAI in April, accusing the company that's now known as SpaceXSI of using unpermitted methane gas turbines to power data centers in the Memphis area. Despite the ongoing lawsuit that also claimed it's violating the Clear Air Act, Elon Musk's company continued to add more gas turbines to another AI data center site in the nearby Southhaven, Mississippi community. In response, xAI requested to dismiss the NAACP lawsuit and even received support from the Justice Department, which claimed that the company's operations are a crucial part of US military operations.
xAI said the lawsuit should be dismissed, claiming that its turbines were exempt from permitting requirements since they were mobile. Judge Brown wrote in her decision that the power plant where all the turbines were providing power to xAI's data center wasn't mobile and therefore not exempt from the permitting process. The lawsuit comes at a time when AI companies are ramping up the construction of data centers to fuel their AI needs, while neighbors are becoming increasingly averse to these buildouts.
The organization filed its legal action against xAI in April, accusing the company that's now known as SpaceXSI of using unpermitted methane gas turbines to power data centers in the Memphis area. Despite the ongoing lawsuit that also claimed it's violating the Clear Air Act, Elon Musk's company continued to add more gas turbines to another AI data center site in the nearby Southhaven, Mississippi community. In response, xAI requested to dismiss the NAACP lawsuit and even received support from the Justice Department, which claimed that the company's operations are a crucial part of US military operations.
xAI said the lawsuit should be dismissed, claiming that its turbines were exempt from permitting requirements since they were mobile. Judge Brown wrote in her decision that the power plant where all the turbines were providing power to xAI's data center wasn't mobile and therefore not exempt from the permitting process. The lawsuit comes at a time when AI companies are ramping up the construction of data centers to fuel their AI needs, while neighbors are becoming increasingly averse to these buildouts.