xAI subsidiary plans to buy 418 Mississippi homes to end noise lawsuit

A real estate agent in Southaven, Mississippi, told residents that a subsidiary of Elon Musk’s xAI intends to purchase 418 homes. Eighteen homeowners have already agreed to sell their properties to the company. The offers are tied to a legal strategy to resolve a local dispute over industrial noise.

MZX, the xAI entity handling the transactions, sent letters to several households detailing the terms. To accept the money, homeowners must sign a standard real estate contract. At the closing table, they must also sign a separate release agreement. This document waives all claims related to the Southaven Plant, specifically barring sellers from joining the Haley lawsuit. Once signed, sellers lose the right to seek damages or bring independent claims against the company.

The Haley lawsuit was filed by three local residents who argue that the company’s massive data center and gas-fired turbines create near-constant noise and vibrations. MZX denies the allegations but says it needs property for business operations. The company has expanded its footprint in the region, building two large facilities in Memphis known as Colossus and a power plant in Southaven, just across the Tennessee border.

Renters in the area face immediate pressure as landlords sell. Several tenants report receiving 60-day eviction notices because their landlords agreed to the xAI purchase offers. This dynamic forces residents out of their homes as the company consolidates ownership of the neighborhood.

The legal battle is expanding beyond the private lawsuit. The National Association for the Advancement of Colored People accuses xAI of operating dozens of unpermitted methane gas turbines in Southaven. A federal judge blocked the Trump administration from dismissing this case earlier this month, allowing the suit to move forward.

Financial risks are mounting for the company in the state. Mississippi’s governor cited a plan for xAI to invest more than $20 billion in the area earlier this year. However, recent reports indicate the company faces potential civil penalties of up to $6.1 million for environmental law violations. Claims for more than $220 million in unpaid bills for work at the Memphis and Southaven sites are also circulating.

Local government action is slowing but not stopping the buildout. The Memphis City Council voted down a proposed one-year moratorium on AI data centers last week. The council instead adopted an ordinance that pauses construction for 135 days, a compromise that leaves the regulatory path open for continued expansion.