xAI faces legal challenge over gas-powered plant
12 Apr 2026

Elon Musk's artificial intelligence (AI) company, xAI, is facing a legal challenge in Mississippi.

According to a CNBC, the legal challenge comes from environmental groups including the NAACP and Young, Gifted & Green.

They are seeking to have the state revoke a permit granted to xAI for building a gas-powered plant.

The facility is part of xAI's plan to support its AI operations with data centers.

Environmental groups warn of health risks to local residents
Health risks

The environmental groups have petitioned state authorities, warning that the proposed power plant in Southaven could worsen pollution levels.

Their lawyers argue that the project could increase ozone levels and raise emissions of harmful pollutants like nitrogen dioxide and particulate matter.

They claim this could pose serious health risks to local residents living near the facility.

Permit for installation of natural gas turbines issued in March
Project scope

The Mississippi Department of Environmental Quality issued the permit in March, allowing xAI to install 41 natural gas turbines in DeSoto County.

These turbines are meant to power data centers supporting AI systems.

The company already has a data center in Memphis, Tennessee, and is building another facility in Southaven as part of its expansion plans.

Environmental groups allege permit approval process was expedited
Permit scrutiny

The environmental groups have also questioned how the permit was approved.

They claim that pollution estimates used in the process were inaccurate and that xAI wasn't required to use the cleanest technology available.

They further allege that local communities weren't adequately involved in discussions, and that the approval process may have been expedited.