Musk’s xAI is being sued over its data center generators — now it’s buying $2.8B more

Elon Musk’s xAI is facing a lawsuit regarding its use of polluting generators at its data center near Memphis, Tennessee. The NAACP filed the lawsuit, citing the operation of dozens of unregulated gas turbines that contribute to poor air quality in an already polluted region. The organization is seeking an injunction against xAI’s continued use of these turbines.

Despite the ongoing legal challenges, xAI, a division of SpaceX, intends to significantly expand its turbine infrastructure. SpaceX’s recent IPO filing revealed plans for xAI to purchase an additional $2.8 billion worth of turbines over the next three years. This includes a $2 billion deal specifically for "mobile gas turbines," the same type currently under scrutiny in the lawsuit.

xAI has secured permits for 15 turbines but was reportedly operating 46 a few weeks prior to the lawsuit. Each of these turbines has the potential to emit over 2,000 tons of NOx pollution annually, a major contributor to smog and asthma-inducing conditions.

The company asserts that it can operate the turbines without permits for up to a year, classifying them as "mobile" since they remain on their shipping trailers. This interpretation exploits a perceived discrepancy between state and federal regulations. However, federal regulations and an EPA ruling earlier this year clarify that such turbines, even when mobile, are subject to air pollution laws. SpaceX acknowledged these risks in its IPO filing, noting that injunctions or permit rescissions would negatively impact its AI business.