The NAACP is taking Elon Musk's xAI Corp. to court, arguing that turbines used to power an AI data center near Memphis are putting predominantly Black communities in the area at risk.

The lawsuit adds to growing scrutiny over the real-world costs of the AI boom.

According to the complaint, originally reported by Bloomberg Law, the NAACP, Earthjustice, and the Southern Environmental Law Center sued xAI Corp. and its subsidiary MZX Tech LLC, claiming the companies used gas-powered turbines for the Colossus II data center without first obtaining the needed air permits.

The groups said 27 turbines were installed in Southaven, Mississippi, just under two miles across the border from Memphis, Tennessee, to support xAI's artificial intelligence operations, including Grok.

"The Colossus Gas Plant emits significant amounts of harmful pollutants, including nitrogen oxides ("NOx") and formaldehyde, which are tied to increases in asthma, respiratory diseases, heart problems, and certain cancers," the complaint reads. "These emissions do not stop at the Mississippi state line; Tennessee residents are also exposed."

The NAACP said the area is already burdened by pollution and that the impacts would fall heavily on nearby Black communities. About 39% of the population in Southaven is Black, according to the 2024 U.S. Census Bureau.

The groups are seeking civil penalties of roughly $124,400 per day for the alleged violations and have asked the court for a preliminary injunction, as Bloomberg Law noted.

This case points to larger national conversations about who benefits from the AI boom, and who bears the environmental and health costs?

Data centers can support innovation, jobs, and new tools that improve everything from manufacturing to energy forecasting. AI can also help optimize electric grids, speed up clean energy planning, and improve battery and renewable energy systems.

But those potential benefits come with tradeoffs.

AI data centers can consume enormous amounts of electricity and water, and when companies rely on fossil-fuel-powered equipment to bring projects online faster, local residents may face more pollution, more noise, and potentially higher utility costs. Experts have also raised broader concerns about AI misuse, cybersecurity, and unintended social consequences.

The lawsuit argues that communities that have historically borne the brunt of industrial pollution should not be asked to take on yet another burden in the name of rapid tech expansion.

The legal fight could also help clarify how environmental laws apply to fast-growing AI infrastructure.

One of the central disputes is whether the turbines should be considered "mobile" sources, which face looser regulation, or stationary ones that require stricter permitting. Environmental advocates argue that putting turbines on wheels should not exempt them from oversight if they remain in one place for months.

"There's no question in my mind that it's a bad faith effort, because they did this once, and eventually had to go get permits, and now they did it again," said Jennifer Danis, who is the federal energy director of the Institute for Policy Integrity at the New York University School of Law.

Even some industry leaders have taken issue with how some data centers operate. 

"What we're seeing with these AI data centers is for many of them, they're trying to get it up and running, no matter the cost, as quickly as possible," Abre' Conner, the director of the Center for Environmental and Climate Justice, said.

And as Apolo AI Launchpad CEO Bill Kleyman put it, "The key differences between a good data center neighbor and a bad one: transparency."

"The challenge that we're experiencing is that so much of what we're doing is being lumped into an umbrella," he said. "There's different types of operators out there."

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