The data center operated by Elon Musk‘s xAI in Memphis is facing potential legal action for running a fleet of natural gas turbines without the necessary permits.

What Happened: The Southern Environmental Law Center (SELC) sent a letter to xAI, threatening legal action on behalf of the NAACP. The letter accuses xAI of violating federal law by operating methane gas turbines at its South Memphis data center without the required permits or pollution controls.

A 60-day Notice of Intent to Sue is a required step before initiating a lawsuit under the Clean Air Act

The SELC, on behalf of the NAACP, claims that xAI has installed and operated at least 35 combustion turbines and other air pollution sources at the Colossus site without securing the required preconstruction or operating air permits.

Citing the SELC and NAACP, Tech Crunch reported that the turbines are reportedly capable of releasing more than 2,000 tons of nitrogen oxides (NOx) annually—pollutants that significantly contribute to the formation of smog. This raises serious concerns, especially since Memphis already ranks among the areas with the poorest air quality in the region and was named the nation's asthma capital in 2024.

Although some local officials, including the Memphis Mayor and the Shelby County Health Department, have cited a so-called "364 exemption" for xAI's gas turbines, they have not identified any specific provision that would cover turbines as large as those installed at the xAI site.

xAI did not immediately respond to Benzinga’s request for comment.

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Why It Matters: This is not the first time xAI has faced allegations of environmental violations. In May, the company was accused of operating unpermitted gas turbines at a major data center in Memphis. The situation raised concerns over public health and potential violations of federal and local environmental laws.

Environmental concerns surrounding data centers are not unique to xAI. A report from the Environmental Integrity Project highlighted the environmental risks posed by a series of proposed gas power plants in Texas, designed to supply electricity to data centers. This has led to a significant increase in air pollution in the state, despite underutilized clean energy alternatives.

Moreover, a study from UC Riverside and Caltech found that pollution from Big Tech’s data centers, which power artificial intelligence models and cloud computing, has cost the U.S. public health system an estimated $5.4 billion over the past five years. Companies like Google , Microsoft , and Meta Platforms Inc. have been identified as some of the biggest contributors to this health cost.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.