Elon Musk's AI company xAI is moving to purchase roughly 418 homes in a Southaven, Mississippi neighborhood, and the offer comes with a condition: sign away your right to join a lawsuit over the noise first.

Real estate agents working on behalf of xAI have been going door to door in the Colonial Hills neighborhood, offering to buy homes at market value. The average house in the area costs about $180,000, so the full buyout would run somewhere around $75 million. For a company building what Musk describes as the world's largest cluster of AI supercomputers, that's a rounding error. For the people who live there, it's the neighborhood they chose.

The noise that started this

The lawsuit at the center of the offer was filed in June by three residents who describe "near-constant noise, vibrations and other nuisance-level harms" from an xAI power plant that sits on a former Duke Energy site about half a mile from some of their homes. The plant houses 69 temporary gas turbines, installed without permits, that run around the clock to power xAI's datacenters.

Elizabeth Rose, a piano teacher who lives about two miles from the site, said she has been woken up at 2 a.m. and 3 a.m. by the sound. "It sounds like an airplane engine but it's continuous, it's incredibly loud," she told the Guardian. Jason Haley, one of the three plaintiffs, has owned his home for 20 years and said he never thought of himself as an activist before the turbines arrived. "It's been so torturous I can't sleep," he said.

xAI denies all claims in the lawsuit. The company did not respond to questions about the scale of the buyout or its plans for the neighborhood.

According to a recording heard by the Guardian, a realtor told one resident the company has a target of 418 homes, with 18 already under agreement. The local mayor confirmed the homes would house xAI staff as the company expands. Rose has her own name for what's coming. "It will become Elon Musk's little playground, basically. Elonville."

The faster picture

Since July 2024, xAI has built three large datacenters in the Memphis and Southaven area, which straddles the Tennessee-Mississippi border, under the names Colossus I, Colossus II, and Macrohardrr. Musk is currently spending up to four nights a week in the area, living in an Airstream trailer while overseeing construction. On a SpaceX earnings call this month, he said Grok, the AI chatbot these datacenters support, is growing faster than anything he has seen.

xAI was folded into the SpaceX corporate entity in February, consolidating the infrastructure ambitions under one roof.

The buyout offer puts residents in an uncomfortable position. Market-value cash for a house in a neighborhood growing louder by the month sounds like a reasonable deal, until you consider that accepting it means forfeiting any legal claim you might have had. Residents who don't sell, or who have already joined the lawsuit, get neither the money nor the quiet.

The broader dynamic here is not unique to Southaven. Datacenters are going up fast across the country, often in mid-sized communities that lack the regulatory muscle to slow them down. The noise, the power demands, and the industrial footprint land hardest on the people closest to the sites, who tend to be working- and middle-class homeowners without lawyers on retainer. The buyout model, if it spreads, essentially converts a legal and regulatory problem into a real estate transaction, one the company controls the terms of.

What's left for residents who stay is a neighborhood remade by someone else's ambitions, with the courts as their only remaining leverage and an expiring offer in hand.