xAI Home Buyout: Mississippi Residents Raise Noise Concerns

Residents of a neighbourhood in Southaven, Mississippi, say Elon Musk’s Artificial Intelligence company, xAI, is offering to buy their homes as complaints grow over noise from a nearby power plant supplying electricity to its expanding data centre operations.

According to residents and real estate agents, the proposed purchases come with a condition: homeowners must agree not to join a lawsuit against the company over alleged noise-related harm. The reported plan could involve hundreds of properties in Colonial Hills, a residential neighbourhood near the Mississippi-Tennessee border.

A real estate agent reportedly told one resident that the target was to purchase 418 homes, with 18 homeowners having already agreed to sell at the time of the conversation. xAI did not respond to questions about those figures or its plans for the neighbourhood, according to the report.

The controversy has intensified tensions between residents concerned about noise and pollution and local officials who say the company’s expansion could bring jobs, investment and tax revenue to the area.

Why Is xAI Buying Homes in Southaven, Mississippi?

Real estate agents have reportedly been approaching homeowners in Colonial Hills on behalf of xAI, offering to purchase properties near the company’s power plant and data centre operations.

A letter distributed to nearby residents by MZX, the xAI subsidiary operating the site, said the company required property for business purposes. The reported offer included a contractual condition preventing participating homeowners from joining the existing class-action lawsuit filed over the alleged noise.

According to DeSoto County property records cited in the report, MZX had purchased five homes in the neighbourhood since October 9. Residents believe further purchases could follow as the company continues expanding its operations in the area.

Real estate agents and Southaven Mayor Darren Musselwhite have said the properties could provide housing for xAI employees. The mayor described the purchases as serving several purposes, including accommodating staff and offering a goodwill gesture to residents who view the nearby industrial development negatively.

However, some residents have questioned whether the buyout could eventually affect much of the neighbourhood. Elizabeth Rose, a piano teacher who lives about two miles from the site, said she feared the purchases could expand across Colonial Hills, referring to the prospect as “Elonville”.

Residents Complain About Noise From xAI Power Plant

The main source of frustration is the continuous noise reportedly generated by gas turbines installed to supply electricity to xAI’s data centres.

Rose said the sound resembles an aircraft engine and has disturbed her sleep, sometimes waking her during the early morning hours. She said the noise has become difficult to tolerate and has affected her daily life.

Jason Haley, one of three residents who filed a lawsuit in June, said the turbines had made it difficult for him to sleep in the home he has owned for 20 years. He described hearing a high-pitched hum accompanied by a sound similar to an aeroplane flying overhead.

Haley said he had initially tried communicating with local officials but eventually pursued legal action after becoming frustrated with what he viewed as an inadequate response to residents’ concerns.

He also began posting videos on social media documenting noise levels near the facility, arguing that residents should be able to hold companies accountable when industrial operations affect their quality of life.

The lawsuit alleges “near-constant noise, vibrations and other nuisance-level harms” associated with the power plant. The claims have been disputed by xAI.

What Is the Connection Between xAI’s Data Centres and the Noise?

Since July 2024, xAI has developed three large data centres in the Memphis metropolitan area, which extends across the Tennessee border into Southaven, Mississippi. The facilities are known as Colossus I, Colossus II and Macrohardrr.

The data centres support the company’s artificial intelligence ambitions, including the development of its Grok chatbot. Elon Musk has been spending significant time in the Memphis area overseeing the expansion, according to the report.

The rapid development has brought new business activity to the region but has also generated opposition from residents concerned about the impact of industrial infrastructure near their homes.

The power plant at the centre of the dispute was formerly associated with Duke Energy and reportedly houses 69 temporary gas turbines used to supply electricity to the data centres.

Residents say the turbines operate around the clock and produce persistent noise. Some have also raised concerns about air pollution from the equipment.

EPA Raises Concerns Over Turbines Operating Without Permits

The environmental dispute extends beyond noise. According to the report, the US Environmental Protection Agency determined that dozens of temporary, truck-sized gas turbines at the xAI site had been operating without permits required under federal law.

The EPA also indicated that enforcement of the relevant permit requirements was a matter for the state.

Although on-site air pollution monitoring had not been conducted, the Southern Environmental Law Center estimated that emissions from the turbines could cause approximately $44 million in annual health costs. The estimate was attributed to the environmental organisation and was not presented as a measurement of independently verified health damages in the neighbourhood.

Residents have expressed particular concern about pollutants such as nitrogen oxides and formaldehyde, citing the potential risks for children with asthma and older people with chronic obstructive pulmonary disease (COPD).

In April, environmental groups and the National Association for the Advancement of Colored People (NAACP) filed a federal lawsuit seeking to stop the use of the turbines.

The US Department of Justice subsequently attempted to block the lawsuit, arguing that xAI technology had been used in the war against Iran and was therefore required for national security reasons. The attempt to block the lawsuit was unsuccessful, according to the report.

xAI’s Response to Noise Complaints

xAI has denied the allegations concerning excessive noise and has said it cares about being a good neighbour. The company has also reportedly adjusted power output and constructed sound-dampening walls in response to concerns.

In July, xAI agreed with state regulators to transform the existing power plant into a newer, permanent gas-fired facility by the following summer. The proposed transition is expected to reduce noise from the temporary turbines.

However, residents opposing the facility remain sceptical, citing concerns about the company’s previous use of turbines without the required federal permits and potential separate fines related to stormwater violations.

Haley said earlier assurances had not always translated into the changes residents wanted, leaving him hopeful but uncertain that the situation would improve.

What Does the Home Buyout Offer Require?

The reported buyout arrangement includes a condition that homeowners agree not to join the class-action lawsuit against xAI over the alleged noise and related nuisance.

For some residents, that requirement is a major obstacle. Gavin Foust, a paramedic who lives near Haley, said he would not accept the offer because of the restriction on pursuing legal action.

Foust said some neighbours, including elderly residents, had agreed to sell because they wanted to leave the area and avoid the disturbance. He argued that people should not have to choose between selling their homes and seeking legal remedies over conditions they believe are harming them.

Rose also expressed opposition to the buyout, saying she would resist selling even if the offer substantially exceeded her home’s value.

The average house price in the area is approximately $180,000, according to the report. Purchasing properties at market value could represent a relatively small expense for a company pursuing a large-scale AI infrastructure expansion.

Southaven Mayor Defends Data Centre Development

Southaven Mayor Darren Musselwhite has defended the broader development, pointing to the economic benefits that the data centres could bring to the region.

He said the facilities could generate substantial tax revenue for DeSoto County and improve the quality of life for local taxpayers. The mayor has also overseen a land-swap arrangement with xAI that resulted in a new police and firefighter training centre for the city.

Musselwhite said the home purchases were not intended to create a company town. Instead, he described them as serving multiple purposes, including providing accommodation for employees and addressing concerns among residents who view the industrial development negatively.

The mayor also said managing noise was a top priority. According to him, city monitoring had not detected a violation of the local noise ordinance limit of 70 decibels.

Critics, however, point to concerns that persistent noise at lower levels can also affect health and wellbeing. The disagreement reflects a wider debate over how local governments should balance industrial development with residents’ quality of life.

Why the Mississippi xAI Dispute Matters

The conflict in Southaven reflects growing tensions between the rapid expansion of artificial intelligence infrastructure and the communities hosting it. Data centres require substantial electricity, and the infrastructure used to supply that power can create noise, emissions and land-use concerns.

In Southaven, the disagreement has developed into a dispute over more than the operation of gas turbines. Residents are also questioning whether the proposed home purchases offer a fair resolution when the reported agreement restricts participation in ongoing litigation.

For xAI, acquiring nearby properties could provide accommodation for employees and help address complaints from some residents. For those who oppose the development, however, selling their homes may not resolve broader concerns about pollution, noise or accountability.

The outcome will depend on the ongoing legal and regulatory processes, the company’s efforts to address the turbines’ impacts and whether residents believe they have meaningful options beyond accepting a buyout.

Frequently Asked Questions

Why is xAI buying homes in Colonial Hills, Mississippi?

xAI, through its subsidiary MZX, is reportedly purchasing homes near its data centre power plant in Southaven. The properties could provide accommodation for employees and serve other business purposes, according to the company’s letter to residents and comments from the local mayor.

How many homes does xAI reportedly want to buy?

A real estate agent reportedly told a resident that the purchase target was 418 homes, with 18 homeowners having agreed to sell at the time of the conversation. xAI did not respond to questions about those figures.

Why are residents suing xAI?

Three residents filed a lawsuit in June alleging near-constant noise, vibrations and other nuisance-related harm from the company’s nearby power plant. xAI denies the noise allegations.

Do homeowners have to give up their right to sue to sell?

According to the report, the buyout offer includes a contractual condition preventing participating homeowners from joining the class-action lawsuit against the company over the alleged noise.

What environmental concerns have been raised about the power plant?

Residents and environmental groups have raised concerns about emissions from temporary gas turbines. The EPA determined that the turbines had been operating without permits required under federal law, while environmental groups have sought to stop their use through litigation.

What has xAI said about the noise complaints?

xAI has denied the allegations and said it cares about being a good neighbour. The company has reportedly varied its power output, built sound-dampening walls and agreed with state regulators to transition to a permanent gas-fired facility.

Does Southaven’s mayor support the data centre expansion?

Mayor Darren Musselwhite has defended the development, citing potential jobs, business activity and tax revenue. He has also said that addressing noise complaints is a top priority for the city.