Musk's xAI Is Buying Up a Mississippi Neighborhood, but Only From Residents Who Agree Not to Sue Over Noise

Real estate agents are going door to door in Colonial Hills, a neighborhood in Southaven, Mississippi, offering to buy homes for Elon Musk's AI company. There is a catch. Sellers must stay out of the class action over the noise coming from the gas turbines that power its data centers.

The offer could swallow almost the whole neighborhood, and every signed contract leaves one less person who can join the case. A letter handed to residents by MZX, the xAI subsidiary running the site, says it "requires property for its business purposes" and will buy nearby houses on condition that the sellers do not join Jason Haley's lawsuit, the Guardian reports.

The company has officially been SpaceXAI since July and was lately rebranded SpaceXSI, but locals still call it xAI.

A target of 418 homes

In a recording heard by the Guardian, a realtor told one resident there is a target of 418 homes, with 18 homeowners already on board. DeSoto county records show MZX has bought five homes in the neighborhood since Oct. 9. xAI did not respond to questions about the numbers.

Offers are at market value, in an area where the average house goes for about $180,000. Mayor Darren Musselwhite says the homes will house xAI staff, and he frames the purchases as generosity. "The buyout is not intended to be a company city at this point," he said, calling it partly "a goodwill gesture from a good corporate citizen for those who perceive the industrial development near them as a negative."

Sixty-nine turbines, half a mile away

The source of the complaints is a former Duke Energy site where 69 temporary gas turbines feed the data centers, about half a mile from the house Haley has lived in for 20 years. xAI has built three data centers in Memphis and Southaven since July 2024: Colossus I, Colossus II and Macrohardrr. Musk spends up to four nights a week in an Airstream trailer in the Memphis area overseeing the build-out.

The EPA determined that dozens of the turbines ran without the federally required permits. In July, xAI agreed with state regulators to turn the site into a permanent gas-fired plant by next summer.

Three locals filed the suit in June, alleging "near-constant noise, vibrations and other nuisance-level harms." Haley describes "a high-pitched hum and then another sound like an airplane over your house," adding: "It's been so torturous I can't sleep." Piano teacher Elizabeth Rose lives two miles away and says she has been woken at 2am by it. Her name for what the town is becoming is "Elonville."

xAI denies all the claims in the suit. It says it varied power output and built sound-dampening walls, and that "we care deeply about being good neighbors." Musselwhite says city monitors have not found a breach of the 70 decibel noise ordinance, though critics point to evidence that persistent noise of 50 decibels or more, like that recorded near the plant, may harm health.

Not everyone wants out

Opposition isn't universal. Some residents aren't bothered, local businesses are busier, and the mayor touts the tax revenue and jobs. Mississippi Gov. Tate Reeves has said curbs on data centers mean "surrendering the future of technology to China." That argument is getting tested well beyond Southaven, as local communities have blocked about $200 billion of data center projects.

In Colonial Hills, the fight has come down to individual front doors. Gavin Foust, a paramedic and army veteran, says his elderly neighbors just agreed to sell. He won't, because of the condition attached. "Why push people out?" he said. "It's reckless and shameful."

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