Musk AI Firm Offers Cash for Homes to Quiet Lawsuits

A subsidiary of Elon Musk’s xAI is paying homeowners in Southaven, Mississippi, to drop their legal claims over data center noise. The company’s entity, MZX, is purchasing 418 homes in the neighborhood. Sellers must sign a release agreement that bars them from joining a lawsuit against the company’s nearby power plant and data center.

MZX is buying the properties to secure land for business expansion while resolving local legal disputes. A letter sent to residents explains that accepting the offer requires signing a contract and a separate release agreement at closing. The document states that homeowners will give up the right to recover damages or bring new claims related to the Southaven facility.

Residents report that the buyout is already displacing people. One local realtor told a resident that xAI plans to buy 418 homes and that 18 homeowners already intend to sell. Renters in the area say they are being forced out. Landlords who agreed to sell their properties have given tenants 60 days to vacate.

The legal pressure stems from a lawsuit filed by three residents. They accuse the company’s massive data center and gas-fired turbines of creating near-constant noise and vibrations. xAI has built two large facilities in Memphis, Tennessee, and is constructing a data center and power plant in Southaven, which sits just across the state border.

Local politics are shifting as the midterm elections approach. Last week, the Memphis City Council rejected a one-year pause on new data center projects. Instead, the council adopted a rule to pause construction for 135 days. This move follows Mississippi Governor Tate Reeves touting the company’s plan to invest more than $20 billion in the region earlier this year.

xAI faces other financial and legal challenges. Reports indicate the company is facing up to $6.1 million in potential civil penalties for environmental violations. It also owes more than $220 million in unpaid bills for work at its Memphis and Southaven sites. The NAACP has also sued the company, claiming it operates dozens of unpermitted methane gas turbines. A federal judge blocked the Trump administration’s attempt to dismiss that case earlier this month.