Elon Musk's xAI permits challenged by NAACP, environmental groups in Memphis

CNBC

17-07-2025

Opposition to xAI's supercomputer facility in Memphis, Tennessee, intensified on Wednesday after environmental and civil rights groups filed to appeal a permit that allows the company to run natural gas-burning turbines to power its massive data center.
When xAI, which is run by Elon Musk, first set up in Memphis last year, the artificial intelligence startup said the turbines it installed initially were temporary and too small to require permits. The company categorized them as "nonroad engine" style generators.
Residents living near the facility complained for months that emissions from the turbines were creating a stench, worsening air pollution in Memphis, and disproportionately impacting people in nearby majority-Black communities.
Still, the Shelby County Health Department issued a permit on July 2, allowing xAI to use up to 15 of the turbines. The department agreed that the turbines were small enough to be considered nonroad engines.
In the appeal, dated July 15, the Southern Environmental Law Center (SELC), which is representing the NAACP, and an environmental group called Young, Gifted & Green claim that the county's health department had ignored residents' concerns.
The SELC also argued that the health department miscategorized the turbines used by xAI and issued the permits improperly, a violation of the Clean Air Act and some local environmental regulations.
NAACP CEO Derrick Johnson said in a statement that, "Our health shouldn't be threatened at the hands of billionaires who circumvent the law."
The gas-burning turbines emit nitrogen oxides and formaldehyde, among other pollutants, according to spec sheets on the website of Solaris Energy Infrastructure, xAI's partner and installer. Exposure to high levels of nitrogen oxides, which are precursors to ozone formation, have been associated with higher risk of death from respiratory disease.
In a statement to CNBC on Wednesday evening, xAI said it was "disheartened (but not surprised)" to see the SELC's appeal. The company accused the firm of making a "baseless, politically driven appeal," and said it has "and will continue to comply with all federal, state and local laws."
Environmental concerns aren't the only controversy facing xAI as the company tries to challenge OpenAI, Google, Meta and others in developing large AI models and services on top of them.
Grok, xAI's chatbot, recently began to generate and spread antisemitic posts across X, including some that praised Hitler. The company apologized days later for making code updates that caused Grok to spit out the offensive content.
Recently, xAI also launched a new Grok feature allowing users to access "AI companions." In tests by NBC News, some of the companions pressured Grok users into sexually explicit or violent conversations.