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SpaceX loses bid to dismiss lawsuit over xAI data center pollution
A federal judge rejects xAI’s mobile-turbine exemption argument, allowing the NAACP’s Clean Air Act lawsuit over Colossus 2 to proceed.
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SpaceX has suffered a setback after losing in a lawsuit aimed at stopping the Clean Air Act requirements on the turbines powering xAI’s Colossus 2 data center in Southaven, Mississippi. According to a report by CNBC, a judge rejected the company’s motion to dismiss the case on Friday, October 30, allowing the National Association for the Advancement of Colored People (NAACP) to proceed, rejecting xAI’s argument that its turbines fall under the ‘mobile sources’ category that exempts it from air permitting requirements.
The case, brought in April 2026 by the NAACP and represented by the Southern Environmental Law Center (SELC) alongside Earthjustice, targets xAI’s operation of a gas-fired power plant to supply electricity to its facility in the Greater Memphis area. SpaceX owns and operates xAI, implicating Elon Musk's wider aerospace and technology company.
According to court documents, NACCP accuses xAI and its subsidiary, MZX Tech, of installing 27 gas turbines in Southaven last year without obtaining the required permits. The applicants also argued that the company’s equipment has been polluting the environment through nitrogen oxide emissions and fine particulate matter, which can contribute to breath-related hazards to residents. The SELC particularly says the plant could emit over 5,00 tons of nitrogen oxides, 400 tons of fine particulate matter, and 47 tons of formaldehyde — a cancer-causing chemical — annually.
The judge also rejected xAI’s attempted classification of the turbines as mobile equipment, holding that the company did not qualify for exemptions under applicable regulations and that the turbines were not exempt from Clean Air Act permitting requirements. Just two weeks earlier, SpaceX suffered another setback after the same court rejected a separate Department of Justice lawsuit that argued against the case proceeding.
“This decision is another important victory in our effort to hold xAI accountable. The courts have repeatedly rejected attempts by xAI and the DOJ to dismiss the NAACP’s Clean Air Act case, affirming our right to pursue justice for communities impacted by pollution. Our position has been clear: xAI cannot operate gas turbines without the required permits. Now that the motion to dismiss has been denied, we look forward to continuing to defend our position in court,” Abre’ Conner, NAACP Director of Environmental and Climate Justice, said. SpaceX is yet to comment on the ruling.
Colossus 2 installed 59 natural gas turbines in July, immediately sparking concerns from residents about emissions and the impact on nearby communities. The Memphis facility plans for about 860,000 Nvidia GB300 GPUs across four Colossus buildings —but it could be more — with Musk stating, “There will be a total of around 1.2M Blackwells at Colossus 2 by end of year”
Elon Musk just gave a massive update on Colossus 2 in Memphis, and the scale of what's being built is absolutely insane
Two buildings already packed with GB300s, two more are coming online within weeks, and it is heading toward roughly 860,000 NVIDIA GB300s
Here's the breakdown:
• Macroharder: 220,000 GB300s, 800-gig NICs, configured for training
• Minihard: 220,000 GB300s, same training configuration
• Gun Range: 220,000 GB300s, tracking to be operational by the END OF NOVEMBER
• Spam: ~200,000 GB300s, configured for inference, targeting DECEMBER
That's roughly 860,000 GB300s across these four buildings
Spam is designed for inference, which needs much simpler networking and less than HALF the fiber of the training buildings. And yes, the building once housed Hormel products
Elon personally walked the entire Colossus 2 site around midnight and again the next morning to check progress
Building by building, SpaceXSI is a