The xAI Colossus File · Memphis, Tenn. · Southaven, Miss. · Clean Air Act
Court records, state permits and credited reporting · checked Oct. 20, 2026
xAI’s Memphis supercomputer runs on gas turbines across the state line.
The Justice Department tried to stop the lawsuit over them. A judge said no.
Elon Musk’s xAI built Colossus 2, one of the largest AI computing sites in the country, in a former warehouse in south Memphis. Most of its electricity does not come from the local utility. It comes from gas turbines a few miles south, in Southaven, Mississippi, that state regulators let run without air permits by treating them as temporary, movable equipment. Their number grew from 18 to 69 in less than a year. In April 2026 the NAACP sued under the Clean Air Act. In June the Justice Department asked the court to throw the case out, filing a Pentagon declaration that credits xAI’s Grok model with a role in the U.S. strikes on Iran. On Oct. 19, the judge let the government into the case but refused to dismiss it. Here is what was built, how many turbines ran when, the permits, the lawsuit, the government’s argument, the public money on both sides of the line, and what none of these records show.
Two supercomputers in Memphis. The power plant for the second one is in Mississippi.
xAI, the artificial-intelligence company Elon Musk founded in 2023 (after SpaceX acquired it, the company was renamed SpaceXAI in July 2026; the court case still uses X.AI Corp.), trains its Grok models in the Memphis area. Its sites sit on both sides of the Tennessee–Mississippi line, a few miles apart.
Colossus 2
A 1-million-square-foot building at 5420 Tulane Road in Whitehaven, bought in March 2025 (about $80 million, per FOX13). Memphis Light, Gas and Water said in July 2025 it supplied only about 0.5 MW there and was not powering the supercomputer. MLGW statement, July 22, 2025; TechCrunch and FOX13, March 7, 2025.Stanton Road power plant
The former Duke Energy plant site at 2875 Stanton Road, about 114 acres bought by xAI subsidiary MZX Tech LLC in July 2025. Temporary gas turbines here feed Colossus 2 through a line across the state border. A permanent 41-turbine plant of about 1.2 GW was permitted in March 2026. MDEQ PSD permit No. 0680-00119; Agreed Order No. 7739 26; DeSoto County News, July 18, 2025.Two more data centers
An 810,000 sq ft former warehouse at 2400 Stateline Road, which Gov. Tate Reeves announced on Jan. 8, 2026 as an investment of more than $20 billion, and a 660,000 sq ft building planned on the city’s old police and fire training site, approved by aldermen in early September 2026. Office of the Governor, Jan. 8, 2026; DeSoto Times-Tribune, Sept. 2, 2026.How big is Colossus 2? Estimates do not agree. Musk has described it as a gigawatt-class site. Satellite images from January 2026 showed cooling equipment for roughly 350 MW (DatacenterDynamics). Epoch AI, a research group, estimated about 946 MW of computing power by mid-June 2026. No utility filing gives a figure, because the local utility does not supply it. We show the range and do not pick one.
18 turbines in August 2025. 69 by July 2026.
The Southaven turbines are trailer-mounted gas units of the kind used for emergency or temporary power. Their number has been reported by the plaintiffs, the company, the state and satellite analysts, at different times. Each count below is shown with who gave it and when; they are snapshots, not a running total.
| As of | Turbines | Who says so | Record |
|---|---|---|---|
| Aug.–Nov. 29, 2025 | 18 | Trinity Consultants, xAI’s own consultant, as cited by the plaintiffs; MDEQ inventory | PI motion (Doc. 20); Agreed Order 7739 26, App. A; Mississippi Today, Nov. 24, 2025 |
| Dec. 2025–Jan. 2026 | 27 | MDEQ, as reported by Mississippi Today; the state inventory shows 26 units by Dec. 18 and the 27th on Jan. 6. The NAACP notice (Feb. 13) and complaint (April 14) cite 27 | Mississippi Today, Feb. 9, 2026; Agreed order; complaint (Doc. 1) |
| April 14, 2026 | 33 | Plaintiffs, citing an engineering analysis | PI motion, filed May 6 (Doc. 20) |
| Early May 2026 | 46 | MDEQ, confirmed to Mississippi Today (reported May 11); 19 added between March 25 and May 2 | Mississippi Today, May 11, 2026 |
| May 15, 2026 | 57 | Plaintiffs, drawing on Trinity’s May 15 update; first given to the court June 12 | Amended PI motion (Doc. 51) |
| June 15, 2026 | 59 | MZX Tech’s power generation manager, sworn declaration; 14 with added pollution controls (SCR) | Worthington declaration (Doc. 60-2) |
| July 15, 2026 | 69 | MDEQ inventory; the state order bars any more after this date | Agreed Order 7739 26 |
| Aug. 31, 2026 | 11 of the 69 shut down | The company, as reported by WMC Action News 5 | Company statement; not checked against a state record |
At the July peak, MDEQ’s inventory lists about 1,776 MW of nameplate generating capacity across the 69 units. That is generating capacity, not the data center’s computing load, and it is not added to any figure on our data center map. Colossus, the first Memphis site, had its own turbine fight in 2025: the Southern Environmental Law Center (SELC) counted up to 35 there from aerial images; Mayor Paul Young said xAI told him only 15 were running. That site is now permitted for 15.
Mississippi called them mobile sources. That is the whole dispute.
Mississippi (Southaven)
- July 29, 2025 MDEQ wrote to xAI that trailer-mounted turbines kept portable and on the site no more than 12 months were mobile sources outside stationary-source permitting (11 Miss. Admin. Code Pt. 2, Ch. 2, R. 2.13.D). The letter is described in MDEQ’s later order and xAI’s court declaration; SignalData has not seen the letter itself.
- Aug. 21, 2025 MZX Tech applied for a permanent plant permit under the federal Prevention of Significant Deterioration (PSD) program.
- Feb. 17, 2026 MDEQ held a public hearing in Southaven.
- March 10–11, 2026 The state Permit Board voted unanimously to approve, and MDEQ issued PSD Permit No. 0680-00119: 41 simple-cycle turbines, about 1.24 GW nameplate.
- April 9, 2026 SELC, for the NAACP, Young, Gifted & Green and the Safe and Sound Coalition, asked for an evidentiary hearing to contest the permit. No outcome found.
- July 30, 2026 MDEQ and MZX signed Agreed Order No. 7739 26. In it, MDEQ and MZX agree that the operation so far “has not violated Mississippi air permitting requirements,” and every unit gets a retirement date: the 14 smaller SMT-130 units leave by Dec. 31, 2026 (13 of them past the 12-month limit); the last units retire July 14, 2027.
Tennessee (Memphis)
- Jan. 2025 xAI, through an affiliate, applied to the Shelby County Health Department for a permit for 15 permanent turbines at Colossus.
- April 25, 2025 Public hearing at Fairley High School.
- June 17, 2025 SELC sent a notice of intent to sue for the NAACP over unpermitted turbines at Colossus. SELC says xAI removed its unpermitted units; no suit followed over that site.
- July 2, 2025 The health department issued the permit for 15 turbines, with 12-month rolling emission caps and fines up to $10,000 a day per violation (as reported; the permit document has not yet been pulled).
- Dec. 15, 2025 The Memphis and Shelby County Air Pollution Control Board dismissed SELC’s appeal of the permit. WMC reported it as moot; the Memphis Flyer reported a 6-1 vote.
The two readings. MDEQ and xAI say portable turbines that leave within 12 months are not stationary sources, so no air permit was needed. The plaintiffs say turbines this size, run for months as a power plant, are a stationary major source that needed state and federal permits and pollution-control reviews before operating; they also argue such turbines cannot qualify as nonroad engines. In January 2026, the EPA created a “temporary” category in its federal turbine standards for units in place under 24 months; that sets emission limits and does not exempt turbines from preconstruction permits. We found no federal order exempting these turbines from permits.
NAACP v. X.AI Corp., No. 3:26-cv-74, Northern District of Mississippi
- Filed
- April 14, 2026, Oxford Division, after a 60-day notice sent Feb. 13
- Plaintiffs
- National Association for the Advancement of Colored People; Mississippi State Conference of the NAACP
- Defendants
- X.AI Corp.; MZX Tech LLC (its subsidiary, which owns the Stanton Road site)
- Judge
- Debra M. Brown (Judge Michael P. Mills recused May 8)
- Plaintiffs’ counsel
- Southern Environmental Law Center; Earthjustice; Carroll Rhodes (local counsel)
- xAI’s counsel
- Butler Snow; Vinson & Elkins; Boyden Gray
- Claims
- Clean Air Act citizen suit (42 U.S.C. 7604): building and running a stationary source without Mississippi permits; a major source without a federal PSD permit or best-available-control review; and a hazardous-air-pollutant standard for formaldehyde
- Relief sought
- An order to stop running the unpermitted turbines until permits and controls are in place, plus civil penalties
What happened in court
- May 6 Plaintiffs asked for a preliminary injunction (33 turbines).
- June 12 Amended injunction motion (57 turbines as of May 15).
- June 15 xAI moved to dismiss: it says the NAACP has no right to sue here, that it relied on MDEQ’s ruling, and that the citizen-suit provision itself is unconstitutional. The same day, the Justice Department moved to intervene and dismiss (chapter 05).
- Aug. 24 At a phone conference the judge said she intended to deny the government’s motion.
- Sept. 18 The government appealed to the Fifth Circuit (No. 26-60806) before any written order; the Fifth Circuit later refused to pause the case.
- Oct. 19 Judge Brown let the United States intervene but denied dismissal, and called the appeal premature. The government has until Oct. 23 to file its own pleading.
As of Oct. 20, 2026, no hearing has been held on the injunction and the court has not ruled on it or on xAI’s motion to dismiss. These are allegations; no court has found that xAI or MZX violated the law.
The Justice Department argued that only the government should decide, and that the turbines matter to national security.
On June 15, 2026, lawyers from the Justice Department’s Environment and Natural Resources Division filed a “Motion for Intervention and Dismissal,” asking for dismissal with prejudice. It was amended July 7 to say the United States was acting for the EPA Administrator. It did not ask the court to exempt xAI from the Clean Air Act. Its central legal argument is that federal enforcers have priority over private citizens who sue to enforce the law, under the Act and Article II of the Constitution, so the government can end a citizen suit it disagrees with. Its memorandum says a shutdown would hurt the country’s “national, economic, and energy security.”
The judge’s answer, Oct. 19, 2026
Judge Brown granted the United States the right to intervene, which the Clean Air Act gives it in citizen suits. She ruled that nothing in the Act or the federal rules lets the government end a citizen’s suit on its own, and said in a footnote that she did not consider its national-security concerns relevant to that question. The case goes on.
Opinion and Order (Doc. 135), N.D. Miss., Oct. 19, 2026.xAI and the Pentagon, from the records. On July 14, 2025, the Pentagon’s Chief Digital and AI Office awarded xAI, Anthropic, Google and OpenAI agreements with ceilings of up to $200 million each. In September 2025 the General Services Administration made Grok available to federal agencies for 42 cents per agency. In December 2025 the Defense Department (now also styled the Department of War) announced Grok would be added to its GenAI.mil platform. The Justice Department’s motion does not cite these contracts.
A separate federal effort against state AI laws. No record ties it to the turbine case.
On Dec. 11, 2025, President Trump signed Executive Order 14365, “Ensuring a National Policy Framework for Artificial Intelligence” (90 FR 58499). It sets a policy of a “minimally burdensome” national framework for AI and told the Attorney General to form, within 30 days, a task force whose only job is to challenge state AI laws that conflict with it. The Attorney General did so by memo on Jan. 9, 2026. The order lists the grounds the task force may use: that a state law unconstitutionally regulates interstate commerce, is preempted by existing federal regulations, or is otherwise unlawful in the Attorney General’s judgment.
- We found no lawsuit filed in the task force’s name through Oct. 20, 2026.
- The Justice Department did intervene on April 24, 2026 in xAI’s own suit against Colorado’s AI law (D. Colo. No. 1:26-cv-1515); its announcement credits the Civil and Civil Rights divisions and does not mention the task force. Colorado replaced much of that law on May 14, 2026.
- The order’s other deadlines (a Commerce Department list of “onerous” state laws, broadband-funding conditions, an FTC policy statement) fell around March 11, 2026. We found no published Commerce list; the FTC issued a proposed statement July 1.
- The filings in the turbine case came from the Environment and Natural Resources Division. They cite other executive orders (the January 2025 energy emergency and AI orders) but not the task force. The order itself says a federal AI law should not override state rules on data center infrastructure other than general permitting reforms.
No tax-break deal found in Memphis. Fee-in-lieu deals, land swaps and payments in Southaven.
Each figure below measures something different. They are listed side by side and are not added together.
| Where | What | Amount | Kind | Source |
|---|---|---|---|---|
| Memphis | Property taxes xAI was expected to pay (city and county), assessed on about $2.2 billion of property against the $12 billion investment the Chamber cited | More than $30 million | Expected taxes (reported) | Daily Memphian, April 14, 2025 |
| Memphis | Ordinance sending 25% of property-tax revenue from xAI’s sites to surrounding neighborhoods; the FY2026 share | $3,259,282 | Tax revenue set aside | FOX13, Aug. 20, 2025 (ordinance); WSMV, July 22, 2026 (amount) |
| Memphis | City land sold to xAI for its wastewater recycling plant (about 13 acres) | $820,000 | Sale price | WMC, March 19, 2025 |
| Memphis | xAI-funded renovations at four schools near its sites, accepted 7-2 by the school board; finished at two by July 2026 | Not reported | In-kind gift | Chalkbeat, July 30, 2025; Hoodline citing the Daily Memphian |
| Mississippi | State data center incentive (sales and use tax exemption) approved for the Stateline Road data center; city and county fee-in-lieu agreements (Southaven signed Jan. 9, 2026; terms not published) | Not published | Tax incentive | Office of the Governor, Jan. 8, 2026; Mississippi Today |
| Southaven | MZX payment for road widening under a December 2025 agreement with the city | $3.46 million | Payment to city (reported) | Mississippi Today, Oct. 7, 2026 |
| Southaven | Money from MZX to the Southaven Police Department; the agreement says it is not a quid pro quo, and the mayor called it an unrelated transaction | $1.38 million | Payment to police (reported) | Mississippi Today, Oct. 7, 2026 |
| Southaven | Land swap: MZX gets the city’s former 51-acre training site; the city gets 69 acres on Swinnea Road plus cash | $40 million | Payment to city (reported) | DeSoto Times-Tribune; Mississippi Today |
- Neighbors in Southaven: residents sued over turbine noise in June 2026. In September and October, MZX Tech offered to buy nearby homes from owners who release their claims in that suit; Mississippi Today reported some owners accepted, and the mayor called the offers voluntary.
- Air near Colossus: a city-commissioned test in June 2025 reported no dangerous pollutant levels; MLK50 reported outside experts said the wind was not blowing from the site toward the monitor and ozone was not measured. A University of Memphis modeling study reported modeled levels below national standards except fine particles, which it tied to the area’s overall industry. We report what each study says and do not combine them.
- Water: xAI broke ground Oct. 10, 2025 on an $80 million plant to treat up to 13 million gallons a day of wastewater-plant effluent for cooling, instead of drawing on the Memphis Sand aquifer. We could not confirm whether it is running.
- Tennessee law: a 2026 law (HB 1847/SB 2128, signed May 7) lets data centers needing 50 MW or more generate their own power or buy it from independent producers, and makes them pay for grid upgrades they cause.
What these records do not show
Not shown
- That any turbine broke the law. That is the question before the court; in MDEQ’s agreed order, the state and MZX agree the operation did not violate Mississippi permitting requirements.
- That any payment, incentive or land deal influenced a permit or a vote.
- That Grok did what the Pentagon declaration says. It is a sworn statement by the government, not independently checked.
- That the AI Litigation Task Force had any role in the turbine case.
- Any health harm from the turbines; no study we found measured exposure at the Southaven site.
Still being checked
- The government’s pleading due Oct. 23, and whether it pursues the Fifth Circuit appeal.
- Rulings on the injunction and on xAI’s motion to dismiss, including its challenge to the citizen-suit provision.
- The current turbine count after the company’s Aug. 31 figure, against MDEQ’s retirement schedule.
- The state permit appeal; Southaven aldermen minutes and the fee-in-lieu terms; the Stanton Road deed (sources disagree on the seller); the Shelby County permit document; MLGW board votes.
- Whether the Stateline Road data center is operating, and how much power Colossus 2 actually draws.
Responses
- In court, xAI says it relied on the state’s ruling and that its temporary units will leave on the state’s schedule. SELC and Earthjustice say the turbines are an unpermitted power plant. Gov. Reeves and Southaven Mayor Darren Musselwhite have backed the project.
- SignalData will seek comment from xAI/MZX Tech, MDEQ, the Justice Department, the Defense Department, SELC, Earthjustice, the NAACP, the City of Southaven and the City of Memphis before this File leaves preview. Responses will be added here, dated.