Elon Musk's xAI wins permit to build power plant in Mississippi despite pollution concerns

Elon Musk's xAI scored a victory in Mississippi, where regulators on Tuesday authorized the artificial intelligence company to build a power plant with 41 natural gas-burning turbines in the town of Southaven to power its nearby data centers.

The Mississippi Department of Environmental Quality "voted to approve the permit" for xAI subsidiary MZX Tech LLC, "after careful consideration of all public comments and community concerns," MDEQ spokesperson Jan Schaefer told CNBC via email.The NAACP and other civil rights and environmental advocates tried to get the meeting delayed, arguing that it would conflict with some residents' efforts to vote in the state's primary elections, being held on the same day. "We are outraged that, despite the community's clear demand to move the Election Day hearing, MDEQ chose to bulldoze through a decision that silenced the very residents most harmed by it," said Abre' Conner, director of environmental and climate justice at NAACP, in a statement from his organization and the Southern Environmental Law Center. Now owned by SpaceX after a merger was announced in February, xAI has been using more than a dozen temporary turbines for months at the facility in Southaven, claiming that no federal permit has been required. The company has two data centers — Colossus 1 and Colossus 2 — in Memphis, Tennessee, just across the Mississippi state line. As Musk pursues a potential mammoth IPO for SpaceX, which was valued at $1.25 trillion after the merger, he's counting on the area in and around Memphis to supply the power and resources necessary to build out the combined company's AI infrastructure. In addition to its effort to build a power plant in Southaven, xAI also plans to construct another large data center there, dubbed Macrohardrr, in a warehouse that was previously a GXO Logistics facility. Residents in Southaven and Memphis have protested xAI's plans and operations for months due to air and noise pollution issues. "The permit issued by MDEQ has a number of serious flaws that violate federal law, run afoul of the agency's own policies, and put families in North Mississippi and Memphis at risk," The NAACP and the SELC said in their joint statement on Tuesday.XAI didn't respond to a request for comment. Schaefer from MDEQ said by email, "The draft permit met all legal and technical requirements for issuance."The NAACP, represented by SELC, plans to sue xAI over the company's prior and ongoing use of natural gas-burning turbines without federal permits. Opponents argue that xAI understated the amount of pollution that will be emitted by its turbines in its permit application, with particular concerns around smog-forming nitrogen oxides and other pollutants that can be harmful to human health, including formaldehyde and airborne particulate matter. They also say xAI failed to engage in community meetings, or to conduct appropriate environmental reviews while shirking a responsibility to comply with federal air quality regulations.Jason Haley, a Southaven resident who observed Tuesday's vote, told CNBC he was disappointed even though the outcome was expected. Haley said he's been struggling with noise from xAI's turbines and is part of a local coalition called Safe & Sound that's been pushing local politicians to require xAI to control the noise levels. Training and running AI models like Grok, developed by xAI, requires hefty amounts of compute and power, and rising utility bills have been partly blamed on the massive electricity consumption of new data centers. At a meeting last week with the White House, execs from tech companies, including xAI, signed non-binding pledges to supply their own power for their facilities.Patrick Anderson, a senior attorney at SELC, said in Tuesday's statement that regulators are siding with Musk's business ambitions over the concerns of local residents. "Mississippi state regulators appear to be more interested in fast-tracking xAI's personal power plant than conducting a thorough review of its impacts and having meaningful engagement with the families that will be forced to live with this dirty facility—and its pollution—in their communities," Anderson said. WATCH: Musk merger complicates SpaceX IPO Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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