xAI and its subsidiary MZX are reportedly purchasing hundreds of homes situated in Southaven, Mississippi.
A subsidiary of Elon Musk’s xAI has initiated a buyout of homes in a Mississippi neighborhood, contingent upon residents agreeing not to join a lawsuit targeting the company's nearby data center and power plant, according to a report in The Guardian. A realtor canvassing the Southaven area reportedly stated that xAI intends to purchase 418 homes, with 18 owners already having plans to sell. Meanwhile, renters in the vicinity are being displaced, receiving a 60-day notice following their landlords' agreements to sell.
A recent report from the Mississippi Free Press highlights a letter received by several households. The correspondence states: "MZX denies all of the allegations against it. However, because MZX also requires property for its business purposes, MZX, through its real estate broker, is offering to purchase real estate in Southaven in exchange for, among other things, a release of all claims related to the lawsuit. If you decide to accept MZX’s offer, MZX will ask you to sign a real estate contract under which you will agree to execute a separate release agreement at the closing of the real estate transaction."
Crucially, by signing the Release Agreement, homeowners would waive their ability to recover damages or seek relief from the "Haley" lawsuit, effectively barring them from filing their own claims. The agreement outlines the specific claims that would be dismissed.
As reported by The Guardian, xAI proposed this purchase to homeowners specifically to prevent them from joining a lawsuit filed by three residents. These residents accuse the company of emitting "near-constant noise and vibrations" from its massive data center and gas-fired turbines. xAI has accelerated its data center expansion over the past year, constructing two "Colossus" facilities in Memphis and establishing the "Macrohardrr" data center alongside a power plant in Southaven, located just across the Tennessee border.
Growing opposition to AI data centers is creating political tension ahead of the midterm elections. Last week, the Memphis City Council voted to pause construction for 135 days rather than enacting a one-year moratorium. Following Mississippi's governor's endorsement of the company's plan to invest over $20 billion in the region, SpaceXAI has reportedly incurred up to $6.1 million in potential civil penalties for environmental violations, along with more than $220 million in claims for unpaid work performed at both the Memphis and Southaven sites.
Beyond the resident lawsuit, xAI faces additional legal scrutiny from the National Association for the Advancement of Colored People (NAACP), which alleges the company operates dozens of unpermitted methane gas turbines in Southaven. A federal judge recently blocked an attempt by the Trump administration to dismiss this lawsuit.
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