Residents of Southaven, Mississippi, say estate agents working for Elon Musk’s AI company xAI have offered to buy their homes, but only if they agree not to join a lawsuit over noise from a power plant serving its datacentres. The Guardian reports that one agent described a target of 418 homes in a single neighbourhood, and that several purchases have already gone through.
What happened
According to The Guardian, estate agents have been going door to door in Colonial Hills, on the western edge of Southaven, on behalf of xAI. The company was folded into SpaceX in February. A letter handed to residents by MZX, the xAI subsidiary that runs the site, says the firm “requires property for its business purposes”. It offers to buy nearby houses on one contractual condition: the owners must not join a class action brought by local residents.
In a recorded conversation heard by The Guardian, an agent told one resident that the target was 418 homes and that 18 homeowners had already agreed to sell. DeSoto county records show MZX has bought five homes in the neighbourhood since 9 October. xAI did not respond to The Guardian’s questions about these numbers.
The dispute centres on a former Duke Energy site holding 69 temporary gas turbines, which began running in August last year to power xAI’s datacentres. Since July 2024 the company has built three of them, called Colossus I, Colossus II and Macrohardrr, across the Memphis and Southaven area, which straddles the border between Tennessee and Mississippi. The Guardian reports that Musk is spending up to four nights a week in an Airstream trailer near Memphis to oversee the work, which supports development of the Grok chatbot.
Three residents filed a lawsuit in June, complaining of “near-constant noise, vibrations and other nuisance-level harms”. One of them, Jason Haley, has owned his home for 20 years and lives about half a mile from the turbines. He told The Guardian the noise has left him unable to sleep. Gavin Foust, a neighbour, said he would not accept the buyout because of the condition not to sue.
xAI denies all the claims in the lawsuit. It has said it cares “deeply about being good neighbors”, and it has varied its power output and built sound-dampening walls. Southaven’s mayor, Darren Musselwhite, told The Guardian the homes would house some xAI employees and called the buyout “a goodwill gesture”. He said city monitors had not recorded a breach of the local noise limit of 70 decibels. Critics point to evidence that persistent noise of 50 decibels or more, the level recorded near the plant, may be linked to health problems.
Air quality is part of the dispute as well. The US Environmental Protection Agency has found that dozens of the turbines ran without permits required by federal law, though it says enforcement is a matter for the state. The Southern Environmental Law Center estimates the emissions cause $44m in health costs each year. No on-site air monitoring has been carried out.
Why it matters if you live in United Kingdom
The Guardian’s report is about one American town, and it does not mention any British sites, laws or residents. There is no direct change here for people living in the UK. The story is still useful for anyone following how the growth of AI affects the places where its infrastructure is built.
The main lesson is about the terms of an offer. A buyout at market value can sound generous, and the average house price in the area is about $180,000, according to The Guardian. But this offer comes with a condition that limits the seller’s legal options. Foust’s refusal shows the trade-off clearly: a quick sale in exchange for giving up a claim. If you rent or own near any large industrial development, read the conditions of any purchase offer as carefully as the price.
The story also shows that the energy demands of AI products are physical and local. Elizabeth Rose, a piano teacher who lives about two miles from the site, told The Guardian she refuses to use AI because she believes using it makes the plant work harder. Whatever you think of that position, it shows that some people now connect their everyday use of chatbots with turbines running in someone’s neighbourhood.
Finally, the political backdrop matters for anyone watching AI policy abroad. The Guardian reports that Donald Trump has said opponents of datacentre development will become “backwards and poor”, and that Mississippi’s governor, Tate Reeves, has framed limits on datacentres as surrendering technology to China. Others in Southaven welcome the investment. Musselwhite says the development will bring “unprecedented tax revenue”, and local businesses report more trade.
What to watch next
The noise lawsuit filed in June is still live. A separate federal case, brought in April by environmental groups and the NAACP to stop the turbines, has also survived an attempt by the US Department of Justice to block it. The department argued that xAI technology was needed for national security, and it failed. Both cases could shape how far local communities can challenge fast-moving AI infrastructure projects.
In July, xAI agreed with state regulators to replace the temporary turbines with a permanent gas-fired facility by next summer, a change that should reduce the noise. The company may also face separate fines over storm water violations. Haley told The Guardian he remains “hopeful but not confident”.
The number of homes that change hands is the clearest sign to follow. If MZX gets close to the 418 the agent described, Colonial Hills could become largely company-owned housing, whatever the mayor says about it not being “a company city at this point”. For more coverage of AI and the infrastructure behind it, visit Mylistingo.
Source: The Guardian
Sources
- The Guardian: Mississippi residents say Musk’s xAI offered to buy homes if they don’t sue over datacenter noise, accessed 28 October 2026
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