SpaceX fails to dismiss lawsuit over xAI data center emissions - Hardware, PCs and semiconductors

A Mississippi judge has allowed the NAACP’s Clean Air Act lawsuit against xAI and its parent company, SpaceX, to proceed, rejecting claims that turbines powering the Colossus 2 data center qualify for an exemption from air-permitting rules.

SpaceX has lost its latest attempt to dismiss a lawsuit challenging the emissions from turbines used to power xAI’s Colossus 2 data center in Southaven, Mississippi. A judge rejected the company’s motion on October 30, allowing the NAACP’s case to continue.

The lawsuit, filed in April 2026 and supported by the Southern Environmental Law Center and Earthjustice, concerns xAI’s use of a gas-fired power plant at its Greater Memphis facility. The NAACP alleges that xAI and its subsidiary, MZX Tech, installed 27 gas turbines without obtaining the permits required under the Clean Air Act.

xAI argued that the turbines should be classified as mobile sources, which would exempt them from air-permitting requirements. The judge rejected that position, ruling that the equipment did not qualify for the exemption and remained subject to the law’s permitting rules.

According to the legal filings, the turbines emit nitrogen oxides and fine particulate matter. The Southern Environmental Law Center estimates that the plant could release more than 5,000 tons of nitrogen oxides, 400 tons of fine particulate matter and 47 tons of formaldehyde each year.

Abre’ Conner, the NAACP’s director of Environmental and Climate Justice, described the ruling as another victory in the organization’s effort to hold xAI accountable. She said the group would continue pursuing its case over the operation of unpermitted gas turbines. SpaceX had not commented on the ruling at the time of the report.

The decision follows other legal setbacks for efforts to stop the case. The same court recently rejected a separate Department of Justice request opposing its continuation. The DOJ had argued that Colossus 2 supported important national security operations.

Colossus 2 installed 59 natural gas turbines in July, prompting concerns from nearby residents about emissions and their impact on surrounding communities. The facility is planned to house about 860,000 Nvidia GB300 GPUs across four buildings, although the final number could be higher.

In August, the company said it would remove the unpermitted generators and replace them with a larger permitted power plant, a process that could take at least a year. The ruling adds to the legal challenges surrounding the gas-powered infrastructure used by xAI’s data centers.

Sources: Tom's Hardware.