xAI hit by second lawsuit as Memphis residents allege "toxic smog" from Grok’s massive data centre

Elon Musk’s artificial intelligence venture, xAI, is facing a mounting legal and environmental crisis. On February 14, 2026, a coalition of Memphis community groups and residents filed a second major lawsuit against the company, alleging that the "Colossus" supercomputer facility is pumping dangerous levels of toxic pollutants into the surrounding neighborhoods.

The lawsuit comes as xAI races to double the size of the facility to power the next generation of its Grok AI model, a move that critics say prioritizes "computational speed over human lungs."

The invisible threat: Nitrogen Oxides and particulates

The core of the legal challenge centers on the 18 gas-fired turbines and dozens of backup diesel generators xAI installed to power its massive cluster of 100,000 Nvidia H100 GPUs.

Residents in the Southwest Memphis area, a region already burdened by industrial pollution, claim that the facility is emitting illegal levels of Nitrogen Oxides (NOx) and fine particulate matter.

The lawsuit describes a "visible, acrid haze" frequently hanging over the site, which plaintiffs link to a spike in respiratory issues and asthma attacks among local schoolchildren.

The plaintiffs allege that xAI bypassed standard environmental impact studies by claiming the turbines were "temporary," despite the facility running 24/7 for over six months.

The battle for the Tennessee River

Beyond the air quality, the new filing introduces a second front: Water Consumption. xAI recently requested permission to draw up to 1.3 million gallons of water per day from the local aquifer for its cooling towers.

Residents are demanding a permanent injunction against any further expansion until a third-party environmental audit is conducted. They argue that xAI's "Move Fast and Break Things" ethos is being applied to the local water table, risking long-term shortages for the city of Memphis.

The political and economic tug-of-war

The situation has placed local officials in a difficult bind.

On one hand, the Greater Memphis Chamber of Commerce has lauded xAI for the "multi-billion dollar investment" and the creation of hundreds of high-tech jobs.

On the other hand, civil rights leaders in Memphis have labeled the situation a case of "environmental racism," noting that the facility was placed in a majority-Black, lower-income neighborhood that was already struggling with industrial run-off.

Musk’s response: "Efficiency is greener"

While Elon Musk has not commented specifically on the new lawsuit, he has previously defended the Memphis site on X (formerly Twitter), claiming that the facility’s sheer efficiency makes it "the most eco-friendly supercomputer ever built per FLOP (floating-point operation)." He has argued that the gas turbines are a necessary stopgap until a dedicated solar farm and battery storage system can be completed in 2027.