Mississippi Homeowners Offered Cash to Drop Noise Suit Against AI Data Center

A subsidiary of Elon Musk’s xAI is buying homes in Southaven, Mississippi, with a condition: the sellers must drop their legal claims against the company’s local data center and power plant.

The company, operating through its entity MZX, has set a target to purchase 418 properties in the neighborhood. A realtor visiting residents door to door reported that 18 homeowners already have plans to sell. The offer includes a release of all claims tied to the litigation, meaning sellers will give up the right to seek damages or bring future lawsuits on their own behalf.

A letter sent to households details the terms of the transaction. MZX states that while it denies the allegations against it, it requires the property for business purposes. The letter explains that by signing the release agreement at closing, homeowners will be unable to recover damages in the current suit or file new claims related to the Southaven Plant.

The legal pressure stems from a lawsuit filed by three residents. They accuse the company’s gas-fired turbines and data center of creating near-constant noise and vibrations. xAI has expanded its infrastructure in the region, building two large facilities in Memphis and bringing the Macrohardrr data center and a power plant to Southaven, which sits just over the Tennessee border.

Rental agreements in the area are also shifting. Renters report receiving 60 days’ notice to leave after their landlords agreed to sell their properties to MZX. This move comes as opposition to AI data centers grows, with local politicians facing pressure ahead of the midterm elections. Last week, the Memphis City Council rejected a one-year moratorium on new development and adopted a 135-day construction pause instead.

Financial and legal challenges are mounting for the company. Mississippi’s governor previously touted a more than $20 billion investment plan for the area. However, recent reports indicate the company faces up to $6.1 million in potential civil penalties for environmental violations and over $220 million in claims for unpaid work at the Memphis and Southaven sites.

The National Association for the Advancement of Colored People is also suing xAI, alleging the company operates dozens of unpermitted methane gas turbines in Southaven. A federal judge recently blocked the Trump administration’s attempt to dismiss that specific lawsuit earlier this month.