Elon Musk's xAI commits $2.8B for gas turbines despite lawsuit over illegal power plant

Musk's xAI is being sued over its data center generators. Now, it's buying $2.8B more. | TechCrunch

Elon Musk's xAI has gotten itself in hot water over its use of polluting generators at its data center near Memphis, Tennessee. Now, it wants to buy even more of them. In SpaceX's IPO filing, released Wednesday, the company said its xAI division will buy another $2.8 billion worth of turbines for its AI infrastructure over the next three years. One deal, worth $2 billion, is specifically for "mobile gas turbines," the kind that it's currently being sued over. The NAACP filed a lawsuit against xAI last month for operating dozens of unregulated gas turbines that worsen air quality in one of the most polluted parts of the country. The organization has sought an injunction against xAI's use of the turbines. So far, xAI has been granted permits for 15 turbines. As of a few weeks ago, it was using 46. Each of the types of turbines xAI is operating have the potential to emit more than 2,000 tons of NO pollution annually, a group of chemicals that contributes to asthma-inducing smog. The company claims that it can operate the turbines for up to a year without permits because they are "mobile" -- that is, they're still on the trailer they were shipped on. The company appears to be exploiting a discrepancy between state and federal interpretations. Mississippi claims it doesn't need to permit mobile generators. But federal regulations say that turbines of that size, even if they're on a trailer, are still subject to air-pollution regulations. The EPA ruled earlier this year that xAI was operating the turbines in violation of federal law. SpaceX acknowledges the risks in its IPO filing. "We currently rely significantly on natural gas and gas turbine technology to power our data center operations," it wrote. Injunctions or rescinded permits "would adversely affect our AI business."

SpaceX Is Spending $2.8 Billion to Buy Gas Turbines for Its AI Data Centers

Elon Musk's SpaceX committed to spending over $2.8 billion in recent months to buy gas turbines to power data centers for its artificial intelligence unit, the company revealed in a regulatory filing on Wednesday. The relatively large investment shows that Musk is continuing to double down on gas turbines, even after SpaceX's use of them prompted public complaints, a lawsuit, and regulatory inquiries into whether the company may be polluting the air with carbon emissions and dodging environmental requirements. A shortage of electricity is the leading constraint on an otherwise roaring data center boom happening across the US. Portable gas turbines -- generators that can run without drawing power from the grid -- have been viewed as quick and temporary solutions until more robust sources of energy come online. In addition to launching rockets and selling satellite internet, SpaceX also owns Musk's xAI unit, which develops Grok. To support the chatbot and other AI efforts, xAI operates a pair of data centers known as Colossus 1 in Memphis, Tennessee and Colossus 2 in Southaven, Mississippi. SpaceX is leasing access to some of the servers at the Colossus data centers for $15 billion annually to Anthropic, the AI startup that develops the Claude chatbot. Musk said on Wednesday that SpaceX plans to sign additional deals. The new details about SpaceX's energy spending are part of a wave of disclosures in the company's prospectus for its initial public offering, a lengthy document that is designed to help potential investors understand the company's financial health and long-term risks. SpaceX is aiming to debut on the Nasdaq stock exchange in the coming weeks. In March, SpaceX agreed to buy $805 million worth of turbines from an unnamed company through 2029, according to the IPO filing. Then in late April, Musk's company struck a deal for $2 billion worth of mobile gas turbines and related items from an unnamed vendor. That deal is still pending. Last week, WIRED reported that 19 new portable turbines had been added to Colossus 2 over the past two months, for a total of 46 units. Portable turbines can be operated without a clean air permit for a year, a rule that SpaceX has used in its favor. Some of the turbines were added after the NAACP and other advocacy groups sued xAI, alleging that the company had been operating 27 gas turbines without appropriate permits, posing a risk to public health and the climate. As of March, SpaceX had enough servers between the two data centers to use about 1 gigawatt of power, which is about as much electricity as is used by a large US city. But the company expects to keep growing, which will increase its power needs. SpaceX has more than $14 billion in construction that is in progress, including the value of data center equipment that's not yet operational, according to Wednesday's filing.

Is Musk Running an Illegal Power Plant? The D.O.J. Says It Might Weigh In.

In a court filing, the administration signaled support for Elon Musk's artificial intelligence company in a lawsuit challenging xAI's generators at a huge Mississippi data center. The United States government is preparing for a possible intervention to help defend Elon Musk's artificial intelligence company from a lawsuit that accuses the company of illegally operating gas turbines to power a large data center in Mississippi, court filings showed. The NAACP sued Mr. Musk's company, xAI, which powers the Grok chatbot, last month, claiming that the company was operating 27 gas turbines without an air permit in Southaven, Miss. It effectively built a power plant for its Colossus 2 data center, sending pollution into nearby neighborhoods, the NAACP claimed. The A.I. company, now owned by Mr. Musk's space venture SpaceX, has consistently said that its turbines are mobile and temporary, and thus exempt from more stringent air permitting. It has also pointed out that gas turbines are a cleaner alternative to other forms of power, like coal or diesel generators. Now, the Justice Department is preparing for a possible intervention in support of Mr. Musk. "It is the policy of the United States to sustain and enhance America's global AI dominance in order to promote human flourishing, economic competitiveness, and national security," Adam R.F. Gustafson, principal deputy assistant attorney general at the Department of Justice, wrote in a court filing posted late Wednesday. The federal government was seeking "an opportunity to intervene where a ruling or decree would be inconsistent" with the government's policies, he wrote. He asked that the court, the U.S. District Court for the Northern District of Mississippi, provide the government with more time for it to evaluate the lawsuit. And he referred to an executive order issued by President Trump just days into his administration that called for an acceleration of A.I. development by U.S. tech companies. The Justice Department did not immediately return a request for comment. The company couldn't be reached for comment. In its lawsuit, the NAACP, the nation's largest civil rights organization, alleges that xAI and its subsidiary, MZX Tech, installed 27 unpermitted gas turbines to power huge data centers, potentially emitting 1,700 tons of smog-forming pollution a year near a predominantly Black community. Gas turbines can emit smog-forming pollution, as well as soot and hazardous chemicals like formaldehyde and benzene, which are linked to asthma, respiratory diseases and other health problems. Since then, xAI has added more generators, bringing the number of mobile gas turbines operating at its site to nearly 50, according to a May 6 email sent by a company representative to the Mississippi Department of Environmental Quality and reviewed by The New York Times. The NAACP argues in its lawsuit that the generators are illegal stationary sources of air pollution that bypass mandatory health protections and pollution controls. It is asking the court to declare that xAI has violated the Clean Air Act and to force xAI to stop operating the turbines in question until it can go through the proper permitting process. The Southern Environmental Law Center, which represents the NAACP, declined to comment.

SpaceX IPO Filing Reveals Nearly $3 Billion Investment in Gas Turbines for AI Data Centers

SpaceX officially filed for its initial public offering on Wednesday, and its lengthy prospectus revealed a significant investment in gas turbines to power the company's AI data centers. This disclosure comes amid ongoing litigation over its use of the air-polluting generators. Elon Musk's xAI, which merged with SpaceX in February, was sued by the NAACP in April. The organization, represented by the Southern Environmental Law Center and Earthjustice, alleges that xAI and its subsidiary, MZX Tech, illegally operated 27 natural gas turbines without an air permit at its data center power plant in Southaven, Mississippi. But that hasn't discouraged xAI from installing more turbines, according to reports published last week. Apparently, the company added 19 of them to its fleet between late March and early May. Now, SpaceX's S-1 filing shows that the company is digging its heels in further. It states that on April 30, SpaceX entered a purchase agreement with an unspecified company to purchase approximately $2 billion worth of mobile gas turbines and related equipment. The document also indicates that during a period of three months ending on March 31, SpaceX executed purchase agreements with an unspecified company to acquire an additional $925 million worth of turbines through 2029. Gas turbines are internal combustion engines that burn natural gas to spin a turbine and generate energy. Tech companies are increasingly turning to them to support the enormous, around-the-clock energy demands of their data centers. While they are more efficient than conventional coal-fired power plants, they still burn fossil fuels, emitting carbon and hazardous air pollutants in the process. The Clean Air Act, therefore, requires companies to obtain an air permit prior to installing and operating gas turbines. In March, xAI received permission to build a 41-turbine power plant in Southaven, Mississippi, to power its Colossus 1 and Colossus 2 data centers, but the NAACP lawsuit alleges that the company operated 27 turbines without a permit between August and December 2025. Whether the company actually violated the Clean Air Act depends on whether those gas turbines legally qualify as "temporary-mobile" installations. If so, they would fall under an exemption that allows them to operate without an air permit for up to a year. The NAACP suit claims that is not the case and that air pollution generated by the turbines threatens the health of "tens of thousands of people" who live in their vicinity. “A much larger share of this population is Black than that of the country’s population as a whole," the lawsuit states. The SpaceX IPO filing discloses the lawsuit and states that "the company intends to defend itself vigorously in these actions." As of March 31, SpaceX had accrued $399 million in litigation losses, according to the document. Clearly, the company is not backing down. Whether the court will rule in its favor or the NAACP's remains to be seen, but the outcome of this lawsuit could have major implications for regulatory oversight of data center energy infrastructure.

xAI Got Sued Over Its Gas Turbines, so It Naturally Added More of Them

In April, the NAACP sued Elon Musk's xAI, alleging the company illegally operated 27 natural gas turbines without an air permit at its data center power plant in Southaven, Mississippi. Despite ongoing litigation, xAI has apparently added another 19 turbines to its fleet. According to the Mississippi Department of Environmental Quality, the company now has 46 "temporary-mobile" turbines at its Southaven facility, Mississippi Today reported Monday. Internal emails between an MDEQ official and a representative from Trinity Consultants, obtained by the Southern Environmental Law Center and shared with WIRED, reportedly show that xAI installed the additional 19 turbines between late March and early May. Gizmodo was unable to independently verify these claims, and neither xAI nor the MDEQ immediately responded to a request for comment. Gas turbines are internal combustion engines that burn natural gas to spin a turbine and generate energy. Demand for them has surged amid the AI boomâ€"tech companies are increasingly turning to on-site gas turbines to meet the enormous, around-the-clock energy demands of their data centers. They're more efficient than conventional coal-fired power plants, but like any generator that burns fossil fuels, these turbines emit hazardous air pollutants, including nitrogen oxides, sulfur oxides, carbon monoxide, and volatile organic compounds. That's why the Clean Air Act requires companies to obtain an air permit prior to installing and operating them. In March, Mississippi regulators granted xAI a permit to build a 41-turbine power plant in Southaven to power its Colossus 1 and Colossus 2 data centers, located just across the Mississippi state line in Memphis, Tennessee. A month later, the NAACP, represented by the Southern Environmental Law Center and Earthjustice, sued the company for allegedly operating 27 gas turbines at the Southaven site between August and December 2025â€"before receiving an air permit. The state let xAI run those turbines during that period because they are mounted on flatbed trailers and therefore fall under a "temporary-mobile" exemption that allows them to operate without an air permit for up to a year, Mississippi Today reports. MDEQ also considers the 19 turbines reportedly added between March and May to be temporary mobile installations. That means no one is monitoring the air pollution generated by these 46 turbines. "Tens of thousands of people, including members of Plaintiffs NAACP and NAACP Mississippi State Conference ('NAACP MS'), live, worship, study and work in the homes, churches, and schools that immediately surround the Colossus Gas Plant, and hundreds of thousands more live in the greater Memphis area," the lawsuit states. "A much larger share of this population is Black than that of the country’s population as a whole." Southern Environmental Law Center attorneys argue this loophole doesn't actually apply to xAI's trailer-mounted turbines. The Clean Air Act defines a stationary turbine as "not self-propelled or intended to be propelled while performing its function. It may, however, be mounted on a vehicle for portability." Earlier this month, the NAACP filed a request for a preliminary injunction to halt the operation of xAI's "illegal power plant" while litigation proceeds, arguing that emergency action is necessary to "protect nearby communities that are facing imminent health harms." The court has not yet ruled on the request. This case highlights the growing tension between AI's power demand and public health and safety, with marginalized communities bearing the brunt of the industry's rapidly expanding impact. The outcome of this lawsuit will either set a precedent for stricter oversight of data center energy infrastructure or reinforce regulatory gray areas that put the public at risk.

Elon Musk's xAI Doubles Down On Unpermitted Turbines During Pollution Fight

Elon Musk's xAI has added 19 portable natural gas turbines at its Colossus 2 data center in Southaven, Mississippi, between late March and early May during an ongoing lawsuit tied to the violation of the Clean Air Act. Benzinga reached out to xAI and the NAACP for comment. Eight of the 19 new turbines were installed after the lawsuit was filed, Wired reported. According to an MDEQ spokesperson, more than 500 megawatts of gas have been generated since mid-March. Toxic emissions from gas turbines can include nitrogen oxides, fine particulate matter and hazardous compounds such as formaldehyde. These pollutants can often be linked to asthma, other respiratory illnesses, cardiovascular problems and certain cancers. The American Lung Association gave DeSoto County, Mississippi, and Shelby County, Tennessee, an "F" grade for ozone pollution in 2026. The Colossus Gas Plant is the culprit for that score, the lawsuit says. Ben Grillot of the Southern Environmental Law Center said the group first spotted additional equipment during an April plane flyover and later determined the increase was larger after reviewing the agency emails. That same day, xAI struck a partnership agreement with Anthropic to use all of the compute capacity at SpaceX's data center Colossus 1, located in Memphis, Tennessee. "We've agreed to a partnership with @SpaceX that will substantially increase our compute capacity. This, along with our other recent compute deals, means that we've been able to increase our usage limits for Claude Code and the Claude API," Claude wrote in a post on X. The partnership will give Anthropic more than 300 megawatts of additional capacity (over 220,000 NVIDIA GPUs) to deploy within the month. Photo: Shutterstock This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.