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between the trees | musings | updated as necessary | notes and thoughts as I wander around these spaces.
I. Context
In June 2025, I learned that xAI had acquired an old power plant in Southaven, Mississippi, to support the demands of the datacenter, Colossus 2—now known as Macrohard— just across the state line in Tennessee. It was a quiet announcement; very few people were aware. I reached out to some local non-profits committed to environmental concerns, and they did not have the capacity. xAI’s expansion in Mississippi has consisted of countless deals shrouded in secrecy, tax incentives, waivers, promises, NDAs, and handshakes.
The roads leading to the power plant had a 24/7 municipal police presence until March of 2026. The xAI security teams were armed. During this time, the political environment was unstable, leading to a Mississippi Department of Environmental Quality hearing to approve or deny the usage of 41 natural gas turbines. On March 10, 2026, the permit was approved. Brett Mayo, Vice President of Operations at Colossus, told the MEDQ permit board that xAI was “trying to understand the universe.” Elon Musk, after making a $20 billion capital investment in Mississippi in January of 2026, was asked why he chose Mississippi. He replied, “Insane execution speed."
The xAI power plant has been operating in Southaven, Mississippi, with 13-69 “temporary” gas turbines, without permits, oversight, or regulation, in direct violation of the federal Clean Air Act, since July of 2025.
The xAI power plant has a well on-site. The permit to withdraw water expired in 2011.
II. Grok
Macrohard and Macrohardrr exist to support the chatbot Grok and the social media platform X by collecting data from user input. xAI claims that Grok is a different kind of chatbot, pulling from real-time input from X and using more “wit” and “sarcasm” than other chatbots. I am not aware of the other uses of these locations in connection with military contracts, business integration, or scientific pursuits.
In July of 2025, Musk updated Grok, loosening “ethical” controls, and a few days later, the chatbot claimed to be “Mechahitler” and spewed antisemitic, racist responses, saying Adolf Hitler was best suited to deal with “vile anti-white hate.” xAI is facing countless accusations and litigation regarding the creation and distribution of CSAM.
Grok is to the AI chatbot industry like Doge is to Bitcoin in the cryptocurrency industry. It is a meme.
Why does xAI need 3 data centers, a power plant, and other infrastructure to support Grok?
How many users pay for Grok? Does Grok need this much computing power?
III. AI Slumlord
In April 2026, an investor meeting was held in Memphis, and shortly after, it was announced that Anthropic would lease Colossus. Musk or Musk's team announced that Grok was only using the Colossus II site (Macrohard).
The lease with Anthropic is valued at 15 billion annually.
Elon Musk, in a post on X, walked back the leasing agreement between Anthropic and SpaceX, saying the lease was for 180 days, not 3 years. This is valued at 7.5B compared to the 45B outlined in the IPO Filings, creating a discrepancy.
Musk acknowledged that the agreement with Anthropic was not a one-off and that SpaceX was in discussions with other potential customers looking to expand its Data Center infrastructure to meet the growing computing needs of new customers over time.
SpaceX entered into a second lease with Google in June of 2026 for 32 months. This agreement is valued just shy of 29.5 billion, if the parties remain in contract for the duration of the lease.
IV. Water
When xAI agreed to locate in Memphis, it stated that the organization would be committed to building a "state-of-the-art water recycling center," in collaboration with Valero and TVA. In April of 2026, the plans for this site were halted. Musk shared on X that the water recycling plant was paused until Macrohard was complete.
The Digital Delta sits above the Memphis Sand Aquifer.
V. Power
In January of 2024, the Mississippi Legislature passed SB 2001. The bill was an act to amend Section 57-75-5 of the Mississippi Code of 1972 to revise the term 'project' to include data centers. This was created to support proposed Amazon Data Centers.
Amazon will receive: a 10-year, 100% corporate income tax exemption; a perpetual 100% sales and use tax exemption on equipment; 30-year rolling sales tax exemptions; and a 3.15% rebate on eligible construction costs. These provisions are contingent upon Amazon continuing to invest 500 million annually and adding 50 jobs per year.
More importantly, this legislation stripped the Public Service Commission (PSC) of its ability to determine if utility investments were prudent. This empowered Entergy to recover costs associated with data center infrastructure modifications to the grid by passing them on to ratepayers.
How does this relate to xAI?
In Mississippi, three paths have been identified for developments that bypass utility oversight. To look at these paths, I will discuss 3 data center developments: Amazon, xAI (SpaceX), and Prado AI.
1. SB 2001 (as mentioned above). This route provides access to power grids in Mississippi, keeping contracts private from ratepayers. Amazon used this route to develop data centers in Madison County, Mississippi.
2. xAI bypassed permitting by acquiring and developing a defunct Duke Energy Power Plant. xAI brought the plant back online by using unpermitted "temporary" turbines. They applied for permits for 41 permanent turbines; however, each "temporary" turbine can operate for "one year" without oversight. They have staggered the rollout of these turbines; according to MDEQ emails, in May of 2026, xAI had 59 turbines in its inventory. Do they intend to actually install permanent turbines? Will they continue to exploit this loophole by continually bringing in new "temporary" devices? In SpaceX's IPO filing, 3B has been outlined for investment in temporary natural gas turbines.
3. Prado AI, this is an independent development using an approach similar to xAI. In March of 2026, Prado AI asked the PSC to issue an opinion if it could build a 350 megawatt natural gas plant in Mississippi, without identifying a specific location, that also includes a data center and AI Fabrication facility. Prado plans to have tenants, and energy costs would be tied to the rent, not measured and billed separately. Entergy pushed back against Prado, stating that providing power to tenants makes them a public utility.
Prado AI is not a tech company, but it's a real estate development expanding into the AI infrastructure space. This is a legal gray zone that bypasses Entergy and PSC oversight entirely.
In May of 2026, the PSC declined to offer an opinion, citing insufficient information.
Prado announced it was moving forward with the development in June 2026.
On August 20, 2026 the TVA Board agreed to provide at least a 100MW power increase for Space X. This agreement allows them to connect directly to their grid to supplement power to Macrohard, and Minihard located in Whitehaven, Tennessee.
VI. Southaven
Elected officials in Mississippi have celebrated xAI's presence. The Mayor of Southaven, Darren Musselwhite, responded to an email of concern about xAI's power plant, stating that I had been misled by "fake news." He was happy to educate me about the misinformation. He provided no fact-based reasoning.
Musselwhite said he would never allow a business that harmed residents into the city.
DeSoto County Supervisors refused to respond to my emails.
In August 2026, during SpaceX's quarterly earning report, Musk indicated his intention to expand his compute power in the Digital Delta 10xs by the end of 2027.
The City of Memphis is in progress of considering a moratorium on new proposed projects, in September of 2026 the final vote was moved to October 2026. In September, Musk indicated that he was living at one of his locations in Memphis in an Airstream, just days before the vote was shifted. What does this mean for DeSoto County?
During a September Board of Alderman meeting in Southaven, Musselwhite said in his report that he has been in the middle between citizens and SpaceX. He communicated that SpaceX would begin a campaign to outline the benefits of their presence and how they are being a "good neighbor." He emphasized that what is happening here with SpaceX is truly patriotic, the noise pollution being portrayed was not really a problem, and assured attendees that SpaceX has brought in acoustic engineers to try to mitigate the sound.
VII. Legal
In April 2026 the NAACP sued xAI for the use of the turbines in violation of the Clean Air Act and endangering public health. The Department of Justice intervened in June of 2026 citing National Security and Grok's role in military operations.
A local coalition was formed by residents living the closest to the xAI power plant. Citizens filed a lawsuit against SpaceX and its subsidiaries in June of 2026 for the harms of the "public and private" nuisance. This class action suit potentially includes all residents living in the borders outlined in the complaint, exceeding potentially 10,000 residents.
Late July 2026 Darana Hybrid, an electrical contractor, filed multiple liens against SpaceX and their subsidiaries properties in Tennessee and Mississippi.
x.AI, CTC Properties, MZX filed a lawsuit against Darana Hybrid in response to the liens alleging overbilling and breach of contract.
Late September 2026 Ferguson Enterprises filed a lien against MZX for 4.2M.
At this time, nine companies have filed liens against SpaceX data centers citing non-payment of services and supplies rendered.
VIII. Links -- Who owns what? Where? Building Permits?
IX. PDF
MISSISSIPPI STATEWIDE AI FRAMEWORK - EDUCATION
MISSISSIPPI INCENTIVES - SB2271
POTENTIAL INCENTIVES - MEMPHIS - DIGITAL DELTA
