Elon Musk’s xAI is facing controversy due to its use of polluting generators at a data center near Memphis, Tennessee, and now plans to acquire more. In SpaceX’s IPO filing, the company disclosed that xAI will invest $2.8 billion in turbines for its AI infrastructure over the next three years, including a $2 billion deal for “mobile gas turbines,” which are currently under legal scrutiny.
The NAACP recently sued xAI for operating numerous unregulated gas turbines that exacerbate air quality in a heavily polluted area. The organization is seeking an injunction to stop xAI’s turbine usage. xAI has been granted permits for 15 turbines, while it currently operates 46.
The turbines used by xAI could emit over 2,000 tons of NOx pollution annually, contributing to smog that induces asthma. xAI argues that it can use the turbines for a year without permits since they’re “mobile”—still on their original trailers, exploiting differences between state and federal interpretations. Mississippi claims no need for permits for mobile generators.
However, federal regulations require that turbines of this size, even on a trailer, adhere to air-pollution rules. The EPA ruled that xAI violated federal law by operating these turbines. SpaceX’s IPO filing acknowledges the risks, stating reliance on natural gas and gas turbine technology is crucial for its data center operations, and any injunctions or permit issues will negatively impact its AI business.