The U.S. Department of Justice has stepped into a legal fight over xAI's gas turbines, asking a federal court to dismiss a Clean Air Act lawsuit on the grounds that shutting down the equipment would threaten national security. The filing, made Monday, ties the company's Colossus 2 data center directly to active military operations — a move that critics say could let other AI companies sidestep environmental rules.
Why the DOJ stepped in
In a filing Monday, the Justice Department joined xAI and the state of Mississippi in seeking dismissal of a lawsuit the NAACP brought in April. The suit, filed under the Clean Air Act, claims xAI ran 27 gas turbines without proper permits to power the Colossus 2 data center near Memphis, Tennessee. The turbines sit in Southaven, Mississippi.
The DOJ argument leans heavily on a Defense Department declaration stating that xAI's Grok AI model is one of only four cleared for use on Secret and Top Secret networks. That designation, prosecutors argue, makes the data center's power supply a matter of national security — and court-ordered shutdowns would risk disrupting military operations.
XAI has called the turbines temporary and trailer-mounted, a reading Mississippi regulators initially accepted before granting a permit in March. But environmental lawyers say the Southaven plant can emit more than 1,700 tons of smog-forming nitrogen oxides per year, plus fine particulate matter and carcinogenic formaldehyde. The site sits in majority-Black neighborhoods that already bear a heavy pollution burden.
A repeat of the earlier Colossus fight
This isn't the first time xAI has faced legal heat over turbines. At the original Colossus site in South Memphis, the company ran as many as 35 unpermitted turbines. After legal pressure in 2025, it reduced the count and licensed 15.
The current dispute centers on the newer Colossus 2 facility. The NAACP argued the company ignored state and federal permit requirements, and that the health effects are concentrated in already overburdened communities. The Justice Department's intervention reframes the issue as a national security imperative, not an environmental dispute.
What the move means for AI and energy
The DOJ's filing fits the Trump administration's stated policy of maintaining U.S. dominance in artificial intelligence. Officials have pushed to speed data center buildout, arguing that regulatory delays would hand advantage to China. But critics say labeling private infrastructure a national security asset could open the door for other AI firms to bypass local and environmental rules.
Supporters of the government action counter that without reliable power, the AI race is lost. The Colossus 2 data center powers Grok, the AI model now used by the Pentagon for classified work. To the DOJ, that makes the turbines not just industrial equipment but a strategic asset.
Unresolved questions and what's next
SpaceX absorbed xAI in February in an all-stock deal worth about $1.25 trillion — the largest merger on record. SpaceX also raised roughly $75 billion in its IPO, pricing near $1.77 trillion. The DOJ intervention could feed bullish sentiment around SPCX stock, which has traded well above its IPO open of $150.
But the legal fight isn't over. SpaceX still faces a separate nuisance suit over the same site, and the core environmental claims remain unresolved. A preliminary injunction hearing is reportedly set for August — the next moment the court could be asked to decide whether Colossus 2's turbines stay on or get shut down.
