A federal judge in Mississippi has rejected an effort by the Trump administration to shut down a lawsuit brought by the NAACP against Elon Musk’s artificial intelligence company, xAI, allowing a closely watched environmental justice case to continue.
The lawsuit, filed by the national NAACP and its Mississippi State Conference, accuses xAI and its subsidiary, MZX Tech, of operating a gas-fired power plant in Southaven, Mississippi, without the environmental permits required under the Clean Air Act. The plant supplies power to xAI’s massive Colossus 2 data center, which supports the company’s artificial intelligence operations.
The case has drawn attention because of the plant’s location near predominantly Black communities in North Mississippi and South Memphis. Reuters previously reported that pollution tied to the project has raised concerns about whether the rapid expansion of AI infrastructure is placing disproportionate environmental burdens on Black neighborhoods.
The Trump administration, acting through the Environmental Protection Agency, sought to intervene in the case and argued that the EPA had the authority to terminate the lawsuit. U.S. District Judge Debra Brown disagreed with that position Monday.
Brown ruled that the EPA could participate in the case, but said nothing in the Clean Air Act gives the agency the power to unilaterally dismiss a citizen lawsuit simply because it has intervened. The ruling keeps the NAACP’s challenge alive while allowing the federal government to remain involved.
The lawsuit was originally filed in April. At the time, the NAACP accused xAI of operating dozens of methane gas turbines without the required permits, effectively creating a private power plant to meet the enormous energy demands of its data center. The organization has argued that nearby residents should not have to bear the health and environmental costs of the company’s rapid expansion.
The NAACP later asked the court for emergency action to stop what it described as ongoing unpermitted pollution. The organization is being represented by the Southern Environmental Law Center and Earthjustice.
The legal fight comes as communities across the country begin confronting the environmental footprint of artificial intelligence. Data centers require enormous amounts of electricity, and developers are increasingly turning to on-site power generation to meet demand. That growth has prompted new questions about air quality, energy use and how quickly environmental regulations can keep pace with the AI boom.
For the NAACP, the case is about more than one data center.
It is part of a broader argument that Black communities should not be expected to absorb additional pollution in the name of technological progress, particularly when those communities have historically faced disproportionate exposure to industrial development and poor air quality.
The judge’s ruling does not determine whether xAI violated environmental law. That question still has to be resolved in court.
What it does mean is that the NAACP will be allowed to continue pressing its case.