xAI is buying a Mississippi neighborhood — with a no-sue clause

xAI aims to buy 418 homes in a Mississippi neighborhood, and 18 owners have already agreed to sell — on the condition they don't join a lawsuit over noise from the company's power plant, a realtor told one resident in a recorded conversation heard by the Guardian.

Real estate agents have been going door to door in Southaven, Mississippi, on behalf of xAI, Elon Musk's AI company that was folded into the SpaceX entity in February. The buyout could swallow almost the entire Colonial Hills neighborhood on the city's western flank. xAI did not respond to questions about the numbers or its plans, and has previously said it intends to be a good neighbor; it denies all claims in the noise lawsuit.

Why is xAI buying houses?

The homes will house xAI staff, according to the realtor and Southaven's mayor, as the company expands across the area. Since July 2024, xAI has built three vast datacenters — Colossus I, Colossus II and Macrohardrr — in the Memphis and Southaven conurbation straddling the Tennessee-Mississippi border. Musk now spends up to four nights a week in an Airstream trailer near Memphis, personally overseeing the build-out behind the Grok chatbot.

"We're seeing the fastest growth I've ever seen in my life for Grok bot," Musk said during a SpaceX earnings call this month. "I've never seen anything grow this fast."

The outlay is small against Musk's ambitions. The average house price in the area is about $180,000, and Musk — the world's richest person and a major Republican donor — wants the world's largest cluster of AI supercomputers.

What started the lawsuit?

The plant, a former Duke Energy site housing 69 temporary gas turbines feeding the datacenters, started its low-level growl in August last year — without the permits federal law requires, the US Environmental Protection Agency has determined. Three residents, exasperated by the din, filed suit in June complaining of "near-constant noise, vibrations and other nuisance-level harms."

"It sounds like an airplane engine but it's continuous, it's incredibly loud," said Elizabeth Rose, a piano teacher who lives about two miles from the site. "I've been woken up at 2am by it, I've been woken up at 3am by it. I sometimes have to just get away from it because it makes me so angry."

"All of a sudden there was a plant there," Rose said. "And now I get the feeling they are trying to expand the buyout to the entire neighborhood. It will become Elon Musk's little playground, basically. Elonville."

Plaintiff Jason Haley, who has owned his home half a mile from the turbines for 20 years, said the noise drove him to act. "There's a high-pitched hum and then another sound like an airplane over your house," he said. "It's been so torturous I can't sleep, I just leave the house or turn on some music until I fall asleep completely exhausted. It drives you insane. You also lose hope because you're being ignored or dismissed. There's no escape."

Haley was enraged when Governor Tate Reeves, a pro-AI Republican, said curbs on datacenters amount to "surrendering the future of technology to China." "I thought I'd make some noise of my own because of this bullshit," Haley said. "Our governor saying I don't love America because I don't like being tortured by noise? That is just asinine and ignorant. We've got to hold people accountable when they are harming other people, I don't care who you voted for, who you pray for or who your favorite team is."

What do sellers give up?

MZX, the xAI subsidiary running the site, told nearby residents in a letter that it "requires property for its business purposes" and will buy houses — with a contractual condition that owners not join Haley's class action. Since October 9, DeSoto county records show MZX has bought five homes.

Gavin Foust, a paramedic who lives near Haley, said his elderly neighbors just agreed to sell. "They are ideal neighbors and planned to live their rest of their lives in that house but they want to get out of Dodge now because they don't want to be bothered by these turbines," Foust said. He won't take the offer himself because of the no-sue clause.

"My hearing was damaged when I was in the army but I can still hear this thing, it's like a jet engine. Why would you put it in a city? Why push people out? It's reckless and shameful," Foust said. He also cited air pollution: no on-site monitoring has been done, but the Southern Environmental Law Center estimates the turbines' toxic emissions have caused $44 million in annual health costs.

In April, environmental groups and the NAACP sued in federal court to stop use of the turbines. The US Department of Justice unsuccessfully tried to block the suit by arguing xAI technology has been used to wage war on Iran and is needed for national security.

"A lot of people in this neighborhood suffer from conditions exacerbated by all the nitrogen oxide, formaldehyde and other garbage put out by these turbines," Foust said. "For kids with asthma or elderly people with COPD it's a mess all round."

Will the noise end?

In July, xAI agreed with state regulators to replace the temporary turbines with a permanent gas-fired facility by next summer, which should reduce the noise. Opponents stay wary, citing the company's repeated unpermitted turbine use and potential fines for storm water violations.

"I've had hopes all along that haven't come through," Haley said. "The same company said it wasn't polluting the air. I'm still hopeful but I'm not confident."

The backlash isn't universal. Mayor Darren Musselwhite, who oversaw a land swap that built the city a new police and firefighter training center, hailed the influx. "This development will produce unprecedented tax revenue for DeSoto county taxpayers that will enhance the quality of life for all," he said.

"The buyout is not intended to be a company city at this point," Musselwhite said. "The buyout has multiple purposes which are to provide homes for some employees and a goodwill gesture from a good corporate citizen for those who perceive the industrial development near them as a negative."

He called dealing with the noise a "top priority" but said city monitors haven't breached the local 70-decibel ordinance. Critics point to evidence linking persistent noise of 50 decibels or more — levels recorded near the plant — to adverse health impacts.

Haley said the fight has drawn the community together and made him question how AI is being "pushed down everyone's throat." "Put it this way, I'm now registered to vote," he said. Rose said she'd refuse even three or four times her home's value: "I wouldn't take the offer if it was up to me, just to make things difficult for Elon. I hate AI, I never understood why it was invented. I refuse to use it because I know touching it will cause that plant to crank up."