SpaceX's AI division, SpaceXAI, lost its bid to dismiss an NAACP lawsuit, which is proceeding in federal court in Mississippi, according to a judge's opinion released late Friday.
The lawsuit claims that the AI division of CEO Elon Musk's aerospace and defense tech conglomerate violated the Clean Air Act by using gas-fired combustion turbines to power its massive AI data centers in Greater Memphis.
The Colossus data centers and a power plant that SpaceXAI is also building in Southaven, Mississippi, have faced community backlash for years.
The Southern Environmental Law Center and Earthjustice filed the suit on behalf of the NAACP in the U.S. District Court for the Northern District of Mississippi in April 2026.
The suit alleges that between August and December 2025, xAI and its subsidiary MZX Tech, installed and operated 27 gas turbines in Southaven, Mississippi, "without an air permit or regard for the health and safety of people living nearby."
(SpaceXAI is owned and operated by SpaceX, which has rebranded it as SpaceXAI or SpaceXSI.)
The turbines emit smog-forming pollutants and particulate matter that can increase health risks and cause an unpleasant odor, among other unwanted impacts, according to the suit.
Lawyers for SpaceXAI argued in their motion to dismiss, filed in June, that the NAACP suit should be tossed because the company's use of the turbines, which it characterized as "mobile," was exempt from permitting requirements. They also argued that NAACP didn't have a right to sue under the federal Clean Air Act, and suits by such community groups were unconstitutional.
The judge presiding over the case rejected those arguments, writing: "Because the plaintiffs have statutory standing under the Clean Air Act, because the combustion turbines are not 'mobile sources' under Mississippi's SIP, and because the citizen suit provision does not violate Article II of the Constitution or the private nondelegation doctrine, the plaintiffs' claims will proceed."
The decision comes about two weeks after the same court rejected a Department of Justice's request to end the case against Musk's company.
SpaceX did not immediately respond to a request for comment.
