SpaceX, Elon Musk’s behemoth company that launches rockets and runs data centers, is set to go public Friday with a target valuation above $1.75 trillion. The move will make Musk, already the richest man in the world, vastly wealthier.
A public offering will allow SpaceX to raise even more money to fund its AI ambitions, including building more data centers, faster.
But even as Musk and other SpaceX investors see a huge windfall, the community hosting xAI data centers already in operation are demanding accountability from the company’s use of polluting gas turbines and a water-treatment facility put on pause earlier this year.
“We’re the extracted and exploited colony of what is going to be one of the most highly valued entities in the world,” says Justin Pearson, who represents portions of Memphis in the Tennessee House of Representatives. “People are going to die because of this pollution.”
xAI is selling $15 billion per year in compute at its Memphis campuses to Anthropic, another company planning a blockbuster IPO in the coming months. “People don’t matter to SpaceX, or Anthropic, or whoever is building these data centers,” Pearson says.
President Donald Trump has suggested the US government could take a financial stake in frontier AI companies in order to begin “giving back” to the American public. But it’s unclear what form that would take—or if such a move would even happen.
SpaceX didn’t respond to a request for comment and Anthropic declined to comment, though its head of public policy and Memphis’ mayor have touted the company’s engagement with the city.
xAI’s Colossus 1 campus in Memphis shot to national notoriety in 2024 when community members began sounding the alarm that the company was running natural gas turbines without permits. Regulators said that a loophole in the Clean Air Act allowed xAI to run what appeared to be as many as 35 turbines without a permit for a year. (Last year, local regulators granted xAI a permit to run 15 turbines on the site until 2027.)
Natural gas turbines emit microscopic particles of fine particulate matter, dubbed PM2.5, which is linked to a variety of health issues, including heart attacks, high blood pressure, and premature deaths in people with preexisting conditions. Experts warn that PM2.5 pollution can be harmful even below levels set by regulators.
xAI’s first data center was built in Boxtown, a historically Black neighborhood in Memphis that already has some of the highest asthma rates in the country from legacy industrial pollution.
“All of us who have family in South Memphis, we know somebody who has died as a result of a bronchial ailment, or a random cancer that has no place in our family tree,” says Richard Massey, a community organizer in Memphis.
The Environmental Protection Agency issued guidance in January that seemed to close the Clean Air Act loophole xAI was using to run its turbines without permits. However, the company had already begun setting up unpermitted turbines in Southaven, Mississippi, to power Colossus 2. As of mid-May, the company had brought in at least 46 unpermitted gas turbines to run on-site, according to emails xAI sent to regulators.
A group of environmental justice groups, led by the NAACP, filed a lawsuit earlier this year against xAI, alleging that the company installed gas turbines “without an air permit or regard for the health and safety of people living nearby.” Earlier this week, residents of Southaven filed a separate class-action lawsuit against xAI and SpaceX, claiming that construction on the data center was disturbing the community.
