Noise, turbines and home buyouts: the fight around SpaceXAI's Colossus data centres

The AI that runs Grok, including the assistant in Tesla cars, needs vast data centres, and those need power. Around Memphis, Tennessee, and just across the state line in Southaven, Mississippi, that has led to a conflict with neighbours that is now in court. In October 2026, a subsidiary of SpaceXAI, the former xAI, started offering to buy homes near its Southaven power plant.

What is happening in Southaven

• Buyout offers: letters on behalf of MZX Tech LLC, a SpaceXAI subsidiary, offer to buy nearby homes. According to Mississippi Today, the offer letter asks for, among other things, a release of claims linked to a pending class action.
• The lawsuit: residents are suing over noise from temporary gas turbines that have been running for more than a year. They want a court order and compensation. A judge has not yet ruled on which neighbourhoods the class covers.
• Air quality: in a separate case, the NAACP argues that the turbines break the federal Clean Air Act.
• Renters: in parts of the affected area, between a third and two thirds of households rent. Mississippi Today spoke to a mother of four who was told to leave within 60 days after her landlord accepted a buyout, shortly after renewing her lease.

Southaven's mayor says the buyouts are voluntary and partly meant to house SpaceXAI employees. The company is hiring for at least 160 jobs in the Memphis area.

The bigger picture

Colossus in Memphis came online in December 2024 after being built in about four months. To get power quickly, the company relied on portable gas turbines while grid connections were arranged. Reuters reported in July 2026 that 59 turbines for the second site had been installed without federal air permits. SpaceX says its AI computing capacity reached 1.7 gigawatts at the end of September, which illustrates the scale involved.

Where Tesla fits in

Tesla is not running these data centres, but it is connected in two ways. It sold roughly $1 billion of Megapack batteries to xAI between 2024 and April 2026, which help stabilise the sites' power demand. And Grok, trained and run on this infrastructure, is the voice assistant in Tesla cars. Batteries store electricity rather than produce it, so they do not replace the turbines; that requires grid capacity or new clean generation.

What to watch

The judge's decision on the class boundaries, the outcome of the NAACP case, and whether SpaceXAI replaces temporary turbines with permanent, permitted power. With Tesla and SpaceX studying a merger, these local disputes could one day land on a combined company's agenda.