xAI Subsidiary Offers To Buy Southaven Homes In Exchange For Lawsuit Releases

Elon Musk’s xAI is offering to purchase residential properties in Southaven, Mississippi, provided the sellers agree to drop legal claims against the company’s nearby infrastructure. The proposal targets a specific neighborhood where residents have complained about noise and vibrations from a data center and gas-fired turbines. A realtor reported that the company plans to buy 418 homes in the area.

According to a letter sent to several households by MZX, an xAI subsidiary, the offer is tied to a release of all claims related to local litigation. The document states that homeowners who accept the offer will sign a real estate contract and a separate release agreement at closing. By executing that agreement, owners will be unable to recover damages or bring new claims on their own behalf regarding the Southaven Plant.

The letter acknowledges that MZX denies all allegations against it but requires the property for business purposes. It specifies that the release covers claims connected to the Haley action, a lawsuit filed by three residents who accuse the company’s facilities of emitting near-constant noise. The legal team behind the letter notes that the release agreement provides further details on the specific claims being waived.

Rents in the area are also affected by the buyout plans. Tenants report receiving 60-day notices after their landlords agreed to sell to the company. A realtor going door-to-door in the neighborhood told one resident that 18 homeowners already have plans to sell. The company has expanded its presence in the region over the past two years, constructing two Colossus facilities in Memphis and bringing a Macrohardrr data center and power plant to Southaven.

Political and financial pressures have mounted on the company in the lead-up to the midterm elections. Last week, the Memphis City Council rejected a one-year moratorium on AI data center development and adopted an ordinance to pause construction for 135 days. Mississippi’s governor previously touted the company’s plan to invest more than $20 billion in the area earlier this year.

Recent reports indicate xAI faces up to $6.1 million in potential civil penalties for environmental law violations. The company also faces more than $220 million in claims for unpaid bills for work performed at the Memphis and Southaven sites. Additionally, the NAACP is pursuing legal action against xAI, accusing the firm of operating dozens of unpermitted methane gas turbines in Southaven. A federal judge blocked the Trump administration’s attempt to dismiss that lawsuit earlier this month.