A set of gas turbines powering SpaceXAI's Colossus I, Colossus II and Macrohardrr data centers in Southaven, Mississippi, and neighboring Memphis, Tennessee, has spurred a lawsuit from residents who call them "a textbook example of putting profits over people."
But there's a twist to this data center saga: SpaceXAI (NASDAQ:SPCX) is is allegedly offering to purchase Southaven homes if the sellers agree not to join the lawsuit.
The class action lawsuit against SpaceXAI, founded by CEO Elon Musk, which was launched by members of the Southaven community, seeks an unspecified amount for damages related to loss of enjoyment of residential property, emotional distress, health impacts and "diminution in property value."
One Southaven resident, in a Guardian article, likened the noise from the turbines to "an airplane engine, but it's continuous." Another told The Guardian, "It's been so torturous I can't sleep."
And it's not just the noise that's a problem. A separate suit filed by the National Association for the Advancement of Colored People (NAACP) claims SpaceXAI is "illegally operating 27 gas turbines without an air permit in Southaven."
SpaceX denies the noise contentions and says it plans to replace the existing gas turbines with ones that boast "advanced emission control technologies."
Meanwhile, Fox 13 Memphis reported that SpacexAI subsidiary MZX Tech LLC — which is also named as a defendant in the lawsuit — distributed letters to locals in which it "denies all of the allegations against it" and "is offering to purchase real estate in Southaven in exchange for, among other things, a release of all claims related to the lawsuit."
Turning Southaven into 'Elonville'?
The real estate offer, however, isn't just a means to quash the lawsuit. According to a recording of a realtor's conversation with a Southaven resident obtained by the Guardian, SpaceXAI is looking to scoop up a whopping 418 Southaven homes to house company employees. They also claimed that 18 homeowners already said yes to the deal.
Southaven Mayor Darren Musselwhite, meanwhile, confirmed to the outlet that the buyouts would "provide homes for some employees" while serving as "a goodwill gesture " to the community. He added his belief that the data center development "will produce unprecedented tax revenue," enhance quality of life and "is not intended to be a company city at this point."
That last point is notable, given that Musk already built company towns in Texas — Starbase and Snailbrook — for employees. One resident who spoke to the Guardian dubbed the proposed Southaven property purchases "Elonville."
Forbes put the cost of buying up 418 Southaven homes at their average market value of $180,000 at $75.24 million, or "less than 1%" of SpaceX's revenue from the first half of 2026.
SpaceXAI, meanwhile, didn't reply to Moneywise's request for comment about the lawsuit or potential real estate purchases in Southaven.
Still, while data center pushback has grown across the country, with 75% of U.S. voters reportedly opposing them, an August Realtor.com study found that "Home prices near newly activated data centers have risen in line with comparable neighborhoods, with no measurable difference in listing or sale prices in the years following activation."
In September the National Association of Realtors reported that "there is no single data center effect" on home values and that real estate agents are almost evenly split on whether the structures positively or negatively impact property values.
A September study published by researchers at the University of California, Berkeley, Harvard and Monash University, Australia, however, concluded that "large data centers reduce housing values within three miles by 3% on average over the following five years." They added that, due to "increasing public awareness of data center externalities," the impact on housing prices begins with the structure's construction announcement, rather than the physical construction, while nationwide "price declines imply $20.6 billion in housing wealth losses" as a result.
As for whether the Southaven residents should take the buyout, Memphis-based attorney Mike Working told Fox 13 that if residents "believe that their home is being affected and there's this loud nuisance of, you know, these huge gas turbines that sound like a factory that are devaluing their home, there may be a motivation to just take the money now and leave."
Other real estate experts, meanwhile, note that, in general, there are various factors to take into consideration when it comes to selling your home near a data center.
Massachusetts realtor Vicky Kustov, for example, wrote that noise, environmental impacts and increases in utility bills are all valid considerations. However, if the situation is manageable, she added that "a data center can usher in broader development in an area and substantial property tax revenue that can be used to improve the community."
And for those focused on the value of the wider community, billionaire Mark Cuban penned a 10-point checklist to help towns negotiate data center developments, including what sort of demands, limits and assurances to require of the company that wants to build near your homes.
Another vital point to consider, though, is one that Realtor.com pointed out in their report: While you might be fine living next to one data center today, that number could multiply in coming years.
"Once a community has zoned for a large data center and the supporting infrastructure is in place, additional facilities become easier to site nearby," they warned. "What begins as one industrial neighbor can become several."
