SpaceXAI, the artificial intelligence division owned by SpaceX, has lost its attempt to dismiss a lawsuit filed by the NAACP concerning pollution from gas-fired turbines at its AI data centers in Greater Memphis. The federal case, ongoing in Mississippi, alleges violations of the Clean Air Act due to SpaceXAI’s installation and operation of 27 gas turbines without proper air permits. These turbines power SpaceXAI’s Colossus data centers and a related power plant in Southaven, Mississippi, sparking community concerns over pollution and health risks.

The lawsuit, initiated in April 2026 by the NAACP with support from the Southern Environmental Law Center and Earthjustice, argues that the turbines emit harmful smog-forming pollutants and particulate matter, adversely affecting local residents’ health and quality of life. SpaceXAI had claimed the turbines were "mobile" and thus exempt from permitting, also challenging the NAACP’s standing to sue under the federal Clean Air Act and raising constitutional issues about citizen lawsuits.

A federal judge rejected SpaceXAI’s dismissal motion, ruling that the plaintiffs have statutory standing and that the turbines do not qualify as exempt mobile sources under Mississippi’s environmental regulations. The court also upheld the right of community groups like the NAACP to bring such lawsuits, dismissing SpaceXAI’s constitutional arguments. This ruling follows a recent court decision denying a request by the U.S. Department of Justice to end the lawsuit against Musk’s company.

The controversy highlights ongoing tensions around SpaceXAI's expansion and environmental practices in the Memphis area, where locals have expressed frustration over the environmental and health impacts of the facilities. SpaceX has yet to comment on the court’s ruling, which allows the lawsuit to proceed and keeps scrutiny on the company’s compliance with air quality regulations at its growing data center operations.