SpaceXAI started Southaven data center construction without water
permits, Mississippi alleges
[November 07, 2026] By
ALEX ROZIER/Mississippi Today
Mississippi’s environmental regulators released details this week on a
set of penalties against SpaceXAI for violating state water pollution
laws by starting construction on its Southaven data center facilities
without needed permits.
The company first announced the potential fines to investors two weeks
ago, speculating the amount could reach as much as $6.1 million.
To limit pollution from construction reaching public bodies of water,
state law requires companies to first obtain a permit. Without proper
protections, rain, for instance, can carry debris and chemicals off
construction sites and pollute natural habitats, drinking water systems
and recreational areas, federal regulators warn.
Earlier this year, SpaceXAI – through its subsidiary, MZX Tech LLC –
asked the Mississippi Department of Environmental Quality for permits
allowing construction within its growingSouthaven footprint, which
includes a power plant as well as land to build a $20 billion data
center facility called MACROHARDRR.
But during a July meeting between MDEQ and MZX Tech, “it became
apparent” the company had already begun construction on the land in
question, impacting about 30 acres, MDEQ records show.
On July 16, a day after the meeting, MDEQ staff visited Southaven and
confirmed the infractions. The agency sent twonotices of violation to
MZX Tech on Aug. 10, both of which “will be subject to the maximum
statutory penalty” of $25,000 for each day construction continues
without the needed permits, MDEQ wrote.
“The Company is cooperating with MDEQ and is in discussions to resolve
the matters through a single agreed order,” SpaceXAI wrote in its Oct.
22 filing with the Securities and Exchange Commission.
It’s unclear where the $6.1 million figure came from. Based on the
$25,000-per-day figure, it could suggest the violations lasted for
several months. But MDEQ declined to say if the amount was accurate,
citing its policy not to comment on pending enforcement matters.
At one of the MZX Tech properties, a former Southaven training facility
that neighbors Horn Lake Creek, MDEQ staff found that “no steps have
been taken to protect stormwater infrastructure at the site,” and that
there was a lack of protection against “fugitive dust emissions.”
At the 2400 Stateline Road property, the site for MACROHARDERR, the
staff found “no controls around storm inlets.” The MDEQ inspectors noted
that, while construction appeared to have started around the beginning
of 2026, the property’s last construction storm water permit expired in
2023.
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The SpaceXAI power plant in Southaven, Miss., is seen Tuesday, Feb.
17, 2026. (Eric Shelton/Mississippi Today via AP)
 MDEQ responds to federal judge
about its turbine exemptions
Last week, a federal judge found that MDEQ had misinterpreted
federal clean air statutes when allowing SpaceXAI to run 69
temporary natural gas turbines without a permit. U.S. District Court
Judge Debra Brown included the opinion in her ruling against a
motion to dismiss the NAACP’s April lawsuit against the data center
company.
MDEQ relied on a federal Clean Air Act exemption intended for mobile
generators, and SpaceXAI’s turbines clearly did not meet that
criteria, Brown reasoned. That distinction is a key focus of the
NAACP’s argument against the company.
The agency responded to the order in a statement to Mississippi
Today on Wednesday.
“MDEQ is aware of the Court’s order and takes seriously all opinions
by a federal court,” agency spokesperson Jan Schaefer said.
“Nonetheless, MDEQ is not a party to that case and the order is not
binding upon the agency. Furthermore, that litigation is ongoing and
subject to appeal so it is not final at this point.
“MDEQ always seeks to make sure our policies are in compliance with
state and federal law and will do the same here once that litigation
concludes.”
The agency first told the Elon Musk-owned company last year that it
could run the generators without a permit because the units are
“affixed to a portable unit (i.e., a flatbed trailer)” and are
therefore considered mobile.
Brown, though, disagreed. She argued that, given the size of the
generators and the fact they aren’t “self-propelled or intended to
be propelled” while operating, the federal exemption for mobile
sources can’t apply.
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