Nikolas Kokovlis | Nurphoto | Getty Images
With SpaceX’s stock rocketing during its first three days of trading, Elon Musk’s company is getting an assist from the Department of Justice, which asked a federal court in Mississippi to toss a case against the company brought by the NAACP.
The suit was filed in April by the NAACP, which claimed that xAI, Musk’s artificial intelligence lab now owned by SpaceX, violated the federal Clean Air Act by using dozens of methane gas-burning turbines to power its AI data centers without proper permits or pollution controls. The turbines emit smog-forming pollutants and particulate matter that can lead to increased health risks and an unpleasant odor.
The NAACP more recently asked the court to issue an injunction stopping xAI from using the turbines until a judge can make a decision.
SpaceX’s Colossus 1 and 2 data centers in and around Memphis, Tennessee, along with the power plants linked to those facilities, have faced protests for more than a year over issues including air pollution, electricity and water consumption and noise around the facilities.
In a motion filed by the DOJ on June 15, attorneys for the department accused the NAACP of threatening “American national, economic, and energy security by seeking to shut off the power supply for artificial-intelligence innovation that supports the Department of War’s military operations.”
Before merging with SpaceX in February, xAI had built the Grok AI model and chatbot in an effort to compete with OpenAI, Anthropic and Google.
Cameron Stanley, who leads AI for the Defense Department is quoted in the DOJ’s filing as saying that Grok’s continued availability “is a matter of paramount national security.”
The DOJ said that during the war in Iran, the military version of xAI’s Grok had “enabled U.S. forces to deploy over 2,000 munitions to 2,000 distinct targets within 96 hours, a testament to the greatly increased operational efficiency made possible by the Grok Gov Model.”
Workers at Elon Musk’s xAI facility, which houses a large supercomputer known as Colossus, used for artificial intelligence data processing, in Memphis, Tennessee, Sept. 11, 2025.
Karen Pulfer Focht | Reuters
Earth Justice, one of the law firms representing the NAACP, told CNBC in an emailed statement that the “DOJ wants to give itself veto power over citizen suits, a key legal tool used to protect communities from illegal pollution for over 50 years.”
The Southern Environment Law center, co-counsel in the case, characterized the DOJ’s motion to intervene as a “massive power grab” by the Trump administration. And Abre’ Conner, the NAACP Director of Environmental and Climate Justice, said by email that, “At a time when the ultra-rich seem to be protected and supported by some of our government entities, it is important that polluting industries don’t get to benefit at the expense of the health of Black communities.”
SpaceX didn’t immediately respond to a request for comment.
Residents who live near the xAI facility in Southaven, Mississippi, just outside of Memphis, filed a separate class action lawsuit earlier this month saying that the company’s power plant leaves them exposed to, “near-constant noise, vibrations and other nuisance-level harms.”
SpaceX held its long-awaited Nasdaq debut on Friday, topping $2 trillion in market cap. The stock has continued to rally this week, exceeding a valuation of $2.8 trillion on Tuesday, surpassing Amazon.
While the xAI data centers were built to fuel Musk’s ambitions in AI, SpaceX is now renting compute capacity to Anthropic and Google.
In May, Gallup released poll results that found seven in 10 Americans oppose constructing data centers for AI in their local area, including nearly half, 48%, who are strongly opposed.
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