SpaceX’s artificial intelligence division lost its bid to dismiss a lawsuit brought by the NAACP, allowing the case regarding air pollution at data centers near Memphis to proceed in federal court.
Lawsuit Over Clean Air Act Violations
The lawsuit states that the AI division of CEO Elon Musk’s aerospace and defense tech conglomerate violated the Clean Air Act by using gas-fired combustion turbines to power massive AI data centers in the Greater Memphis area. The Colossus data centers and an accompanying power plant under construction in Southaven, Mississippi, have drawn community opposition for years. The Southern Environmental Law Center and Earthjustice filed the action on behalf of the NAACP in the U.S. District Court for the Northern District of Mississippi in April 2026.
The complaint asserts that between August and December 2025, xAI and its subsidiary MZX Tech installed and operated 27 gas turbines in Southaven without acquiring an air permit or considering the health and safety of nearby residents. SpaceXAI is owned and operated by SpaceX, which has also used the names SpaceXAI and SpaceXSI. According to the court filing, these turbines release smog-forming pollutants and particulate matter that elevate health risks and generate unpleasant odors.
Court Rejects Dismissal Arguments
In its June motion to dismiss, attorneys for SpaceXAI contended that the lawsuit should be thrown out because the company considered the turbines to be “mobile” and thus exempt from permit mandates. They further argued that the NAACP lacked standing to sue under the Clean Air Act and that community-led lawsuits of this nature violated the constitution.
The presiding judge dismissed these arguments in an opinion, writing that the plaintiffs possess statutory standing, the combustion turbines do not qualify as mobile sources under Mississippi’s state implementation plan, and the citizen suit provision does not breach Article II of the Constitution or the private nondelegation doctrine. Consequently, the legal claims will move forward.
This ruling arrives roughly two weeks after the same federal court denied a request from the Department of Justice to terminate the lawsuit against Musk’s enterprise. SpaceX did not immediately provide a response to a request for comment.
