A subsidiary of Elon Musk’s xAI is proposing to purchase homes in a Mississippi neighborhood under the condition that residents do not join a lawsuit against the company’s nearby infrastructure. According to a report from The Guardian, a realtor canvassing the Southaven area informed one resident that xAI intends to buy 418 homes. The same source indicated that 18 homeowners have already made plans to sell their properties to the company.
The financial incentive comes with legal stipulations. A letter sent to several households by MZX, an xAI subsidiary, states that accepting the offer requires signing a real estate contract. At the closing of the transaction, homeowners would also sign a separate release agreement. This document would effectively waive any claims related to the Southaven Plant, including those connected to the specific legal action known as the Haley lawsuit.
The release agreement specifies that once executed, homeowners would be unable to recover damages or seek other relief from the Haley lawsuit. They would also lose the right to bring independent claims on their own behalf. MZX has denied all allegations made against it but noted that it requires property for its business operations, which is why the purchase offers are being made.
The underlying dispute involves a lawsuit filed by three local residents. These plaintiffs accuse the company’s massive data center and gas-fired turbines of producing near-constant noise and vibrations. xAI has significantly expanded its data center footprint in recent years, building two large facilities nicknamed Colossus in Memphis. Additionally, the company established the Macrohardrr data center and an accompanying power plant in Southaven, a location situated just over the Tennessee border.
Renters in the area report feeling the pressure of these developments. Several have stated that they are being forced to move out, with landlords providing 60 days’ notice after agreeing to sell their properties to xAI. This situation highlights the growing tension between rapid AI infrastructure development and local residential communities.
Opposition to AI data centers is increasing, placing pressure on politicians in the weeks leading up to the midterm elections. Last week, the Memphis City Council voted down a proposed one-year moratorium on AI data center development. Instead, the council adopted an ordinance that pauses construction for 135 days. This decision reflects a compromise in the local regulatory landscape.
Financial stakes have risen for the company in the region. Earlier this year, Mississippi’s governor highlighted xAI’s plan to invest more than $20 billion in the area. However, recent reports indicate that the company is facing potential civil penalties of up to $6.1 million for environmental law violations. Furthermore, there are claims of more than $220 million in unpaid bills for work performed at the Memphis and Southaven sites.
Beyond the resident lawsuit, xAI is also facing legal action from the National Association for the Advancement of Colored People. The NAACP accuses the company of operating dozens of unpermitted methane gas turbines in Southaven. In a significant development earlier this month, a federal judge blocked the Trump administration’s attempt to dismiss this lawsuit, allowing the case to proceed.
