The U.S. Department of Justice has stepped in to support xAI in a lawsuit that could force the company to shut down dozens of unpermitted natural gas turbines powering its Memphis data centers. The move puts the federal government firmly on the side of Elon Musk’s AI company and against a civil rights organization fighting for cleaner air in one of America’s most polluted regions.
According to TechCrunch, the DOJ filed a memorandum warning that if the NAACP prevails in its lawsuit, the outcome would undermine “American national, economic, and energy security by seeking to shut off the power supply for artificial-intelligence innovation that supports the Department of War’s military operations.” The department went further, stating that xAI’s Grok is one of four AI models currently supporting “mission-critical operations,” including recent U.S. military strikes in Iran.
That framing is significant. It signals that the current administration is willing to use national security arguments to protect private AI infrastructure from environmental regulation, a position that could have broad implications for how AI data centers across the country are built and regulated.
The NAACP, represented by the Southern Environmental Law Center, filed the lawsuit in April. The organization had been signaling its intent to sue since June of last year, pushing to end xAI’s use of what it calls “mobile” gas turbines at the company’s Colossus and Colossus 2 data centers. Those efforts went nowhere, and xAI has since added more turbines, bringing the total to 57.
At the heart of the legal dispute is a regulatory loophole xAI is leaning on. Because the turbines remain mounted on trailers, the company argues they qualify as mobile equipment and are exempt from Mississippi air pollution regulations for one year. The Southern Environmental Law Center disagrees, arguing that federal law treats trailer-mounted turbines as stationary sources when used in a fixed location for extended periods, which means they are subject to the same permitting rules as any other industrial equipment.
The health stakes for the surrounding community are real. The Memphis area is already among the most polluted in the United States, and local groups say conditions have gotten worse since xAI’s data centers came online. Monitoring data shows increases in three major air pollutants since the turbines were deployed:
- PM2.5 – fine particulate matter linked to stroke, heart disease, and Alzheimer’s disease
- Formaldehyde – a known carcinogen
- Oxides of nitrogen (NOx) – a contributor to asthma and cardiovascular disease
xAI is not slowing down its expansion. The company is now a division of SpaceX, and SpaceX’s IPO filing states that it plans to purchase another $2.8 billion worth of gas turbines over the next three years to power its AI data centers. At least $2 billion of that is earmarked specifically for mobile gas turbines, suggesting the current setup in Memphis is a template, not an exception.
This case sits at the intersection of two powerful forces pulling in opposite directions. On one side, the AI industry is consuming energy at a pace that existing power grids simply cannot keep up with, pushing companies to find fast, off-grid solutions. On the other, communities near these facilities are absorbing the pollution costs without seeing the economic benefits. The DOJ’s intervention suggests the federal government has picked a side, at least for now.
