SpaceX, which acquired xAI in February, faces mounting opposition to its Colossus and Colossus II AI data centers in Greater Memphis due to noise and emissions from gas-burning turbines. This week, New York Gov. Kathy Hochul enacted a one-year moratorium on AI data center construction, while last week New Jersey Gov. Mikie Sherrill enacted legislation requiring data center operators to pay fair electricity costs. The Memphis facilities have become a cautionary example cited in policy proposals, protests, and litigation across the country. A Gallup poll in May found 70% of Americans oppose AI data center construction in their local areas, with community complaints in Memphis focusing on noise levels residents describe as torture-like and concerns about rising utility bills.
New York and New Jersey Enact Data Center Restrictions
New York Gov. Kathy Hochul enacted a one-year moratorium on AI data center construction this week, drawing criticism from U.S. President Donald Trump, an ally of Musk. Last week, New Jersey Gov. Mikie Sherrill enacted legislation to ensure data center operators pay a fair share for electricity costs instead of shifting expenses to residents and businesses. Policy proposals, protests, and litigation are underway in multiple locations, many directly citing Memphis and SpaceX.
SpaceX Operations Generate Tax Revenue and Community Concerns
SpaceX purchased over 1,100 acres in Greater Memphis for its data centers and power plant. During its first year in operation, SpaceX paid $25 million in taxes, making it the second largest tax-paying property in Shelby County after FedEx, according to Memphis Mayor Paul Young. The company completed Colossus I in 122 days, with Musk announcing the data center came online on Sept. 2, 2024. Google, Anthropic, and Reflection AI inked agreements with SpaceX to rent excess computing capacity at Colossus and Colossus II, deals worth up to $2.32 billion per month. SpaceX pulled off a record-setting IPO in June, with AI and its Colossus facilities at the heart of its growth narrative.
Southaven Residents File Class Action Lawsuit Against SpaceX
Jason Haley of Southaven, Miss., whose house is within a mile of Colossus II, said the noise from the site and its gas-burning turbines is "like a form of torture." Haley joined a neighborhood group called the Safe and Sound Coalition last year to take noise measurements and push for changes. In March, Southaven Mayor Darren Musselwhite pledged to "step-up tougher enforcement" on noise. Haley and other Southaven residents sued SpaceX in a proposed class action lawsuit filed in June, alleging the company created a "public nuisance" with noise from Colossus II. The lawsuit estimates more than 10,000 class members. Neighbors to Microsoft's Fairwater Data Center in Mt. Pleasant, Wisconsin, filed a proposed class action suit over noise issues this month.
NAACP Sues Over Clean Air Act Violations
The Southern Environmental Law Center and Earthjustice sued SpaceX on behalf of the NAACP in April in federal court in Mississippi. They allege the company violated the federal Clean Air Act by using dozens of gas-burning turbines without required permits and without pollution controls in place from the start. The turbines SpaceX used in Memphis can emit thousands of tons of smog-forming nitrogen oxides per year, according to manufacturers' spec sheets. SpaceX also emits particulate matter called "PM 2.5" from construction and operations. NAACP's lawyers asked a judge for an emergency injunction in May to stop SpaceX from using dozens of turbines in Southaven. The U.S. Department of Justice stepped in, asking the court to toss the suit. The DOJ said last month that SpaceX's technology had been used in American military operations in Iran and was crucial for national security. SpaceX is defending against the lawsuit, arguing the turbines currently on site are temporary and plans are in place for permitted turbines with pollution controls.
FAQ
What did New York Gov. Kathy Hochul do regarding AI data centers this week?
New York Gov. Kathy Hochul enacted a one-year moratorium on the construction of AI data centers this week.
Why did Southaven residents file a lawsuit against SpaceX in June?
Southaven residents filed a proposed class action lawsuit in June alleging SpaceX created a "public nuisance" with noise from Colossus II, with residents describing the noise from gas-burning turbines as torture-like.
What violations does the NAACP allege in its lawsuit against SpaceX filed in April?
The NAACP lawsuit filed in April alleges SpaceX violated the federal Clean Air Act by using dozens of gas-burning turbines without required permits and without pollution controls in place from the start.
