xAI subsidiary offers Southaven home buyouts tied to lawsuit release

A subsidiary of Elon Musk's xAI is reportedly offering to buy homes in a Southaven, Mississippi neighborhood if residents agree not to join a lawsuit over noise and vibrations from the company's data center and power plant. The offer, reported by The Guardian, covers hundreds of homes and includes a release of claims tied to the litigation, according to a letter described by the Mississippi Free Press.

Buyout terms and resident impact

According to The Guardian, xAI and its subsidiary MZX are offering to buy hundreds of homes around Southaven. A realtor going door-to-door reportedly told one resident that xAI plans to purchase 418 homes, and that 18 homeowners already have plans to sell. People who rent homes in the area report they are already being forced out, with 60 days' notice after their landlords agreed to sell.

The Mississippi Free Press published a letter received by several households. In it, MZX denies all allegations against it but says it requires property for business purposes. It says MZX, through its real estate broker, is offering to purchase real estate in Southaven in exchange for, among other things, a release of all claims related to the lawsuit.

The letter says residents who accept the offer would sign a real estate contract agreeing to execute a separate release agreement at closing. By executing that release, they would release possible claims related to the Southaven Plant, including claims connected to the Haley lawsuit. Afterward, they would be unable to recover damages or other relief from the Haley lawsuit and unable to bring claims on their own behalf.

Data center expansion and legal pressure

xAI offered to purchase the homes if owners do not join a lawsuit filed by three residents. Those residents accuse the company's massive data center and gas-fired turbines of emitting near-constant noise and vibrations. xAI has ramped up its data center buildout over the past couple of years, constructing two sprawling Colossus facilities in Memphis and bringing its Macrohardrr data center and an accompanying power plant to Southaven, which is located just over the Tennessee border.

Growing opposition to AI data centers is putting pressure on politicians in the weeks leading up to the midterm elections. Last week, Memphis City Council voted down a one-year moratorium on AI data center development and instead adopted an ordinance that would pause construction for 135 days.

Environmental and payment claims

After Mississippi's governor touted the company's plan to invest more than $20 billion in the area earlier this year, SpaceXAI recently reported it is facing up to $6.1 million in potential civil penalties for environmental law violations. It also faces more than $220 million in claims of unpaid bills for work performed at the Memphis and Southaven sites.

In addition to the lawsuit filed by residents, xAI is facing legal action from the National Association for the Advancement of Colored People, which accuses the company of operating dozens of unpermitted methane gas turbines in Southaven. A federal judge blocked the Trump administration's attempt to dismiss that lawsuit earlier this month.

Sources: The Verge