An xAI subsidiary is offering to buy homes near the xAI Southaven power plant in Mississippi. The catch: sellers must give up their claims in a class action over the plant’s noise. The buyer, MZX Tech LLC, wants “a release of all claims related to” the case, according to its offer letter. The Mississippi Free Press first published the letter.
The stakes reach past the few households that have sold so far. The lawsuit says more than 10,000 people live in the area it covers. Each release removes one household’s damages claim, and no judge has yet decided whether the case can proceed as a class action.
What the MZX letter asks Southaven homeowners to sign
The two-page letter carries the heading “Notice of Noise Nuisance Litigation Related to Southaven Purchase Offer.” It works in two steps. The seller signs a real estate contract, then a separate release agreement at closing.
The letter is blunt about the cost. A seller “will be unable to recover any damages or other relief from the Haley lawsuit,” it says in bold type. The seller also gives up the right to bring claims “on your own behalf.”
MZX calls the offer “fully voluntary” and says it “denies all of the allegations against it.” It gives a business reason for buying: MZX “also requires property for its business purposes.”
The letter names no price. Residents told the Mississippi Free Press in September that offers seemed to track Zillow-style estimates. The letter sends questions to Burch Realty Group. It also lists the three lawyers suing the company and tells residents they may hire their own attorney.
The scale emerged this week. The Guardian reported on Wednesday that a real estate agent described a target of 418 homes. The agent said 18 owners had agreed to sell, according to 24/7 Wall St., which summarized that report.
County records show five purchases since Oct. 9, the Guardian found. The company hasn’t confirmed either number.
The noise lawsuit behind the Southaven buyouts
Jason Haley, Preston Herrington and Taylor Logsdon sued on June 8 in federal court in the Northern District of Mississippi. Their 62-page complaint targets the gas turbines at 2875 Stanton Road South. The plant powers xAI’s Colossus I and II data centers in Memphis, just over the state line. Their computers train and run the Grok chatbot.
In less than a year, the complaint says, the turbine count went from 3 to 18 to 27 to 57. Residents describe “high-pitched squealing, continuous engine roaring, low-frequency rumbling, and tonal humming or whining.” Logsdon lives about 0.6 miles from the plant.
The suit makes five claims, from private and public nuisance to negligence. The plaintiffs want a court order to cut the noise. They also seek money for lost enjoyment of their homes and lower property values, but not for personal injury.
The proposed class covers anyone who lived in or owned a home in a set area since August 2025. Stateline Road marks its northern edge and Highway 51 its eastern one. Renters fall inside that definition.
The company has changed shape since June. SpaceX acquired xAI around Feb. 2, 2026, the complaint says, and Musk announced in May that the AI business would become “SpaceXAI.” The letter says the plaintiffs have dropped SpaceX as a defendant. xAI and MZX have asked the court to dismiss part of the case.
Is it legal to buy out class members before a class exists?
Nothing reported so far stops it outright. The court-approval rule for class deals is Rule 23(e) of the Federal Rules of Civil Procedure. It applies to “a certified class” or a class proposed for settlement.
Here no court has certified a class, and these are private real estate deals. So, in our reading, that rule doesn’t reach them.
Judges still have some control. Rule 23(d) lets a court issue orders “to protect class members and fairly conduct the action.” The Supreme Court limited that power in Gulf Oil Co. v. Bernard in 1981.
A curb on contact with potential class members needs “a clear record and specific findings of need,” the justices said.
In our reading, the plaintiffs would need evidence that the letters mislead or pressure residents. No such motion has been reported. MZX’s letter, for its part, describes the lawsuit, calls the deal voluntary and lists the plaintiffs’ lawyers.
Those lawyers have answered with a FAQ for residents. They say they aren’t involved in the offers. To their knowledge, “no court has examined the home buyout offers or approved them.” They add that nobody has made the release public, so they can’t say exactly which rights a seller waives.
What Southaven sellers and renters give up
The price question cuts against sellers. The lawsuit claims the noise has already pushed down home values.
An offer pegged to today’s market estimate may bake in that alleged loss. The release then waives the claim for it. That’s our analysis, and it depends on terms nobody has published.
The plaintiffs’ FAQ makes a related point. A price based on appraisal “may not account for moving costs, the cost of a replacement home, current mortgage rates,” it says.
Taxes matter too. The IRS lets sellers exclude up to $250,000 of gain on a main home, or $500,000 for joint filers. Owners must have owned and lived in it for two of the last five years.
Renters have less say. A renter less than a mile from the plant got 60 days to move out after her landlord took a buyout, Mississippi Today reported.
A tenant keeps whatever class claim she has, but the sale of her home isn’t her call.
Southaven Mayor Darren Musselwhite has called the buyout good corporate citizenship, 24/7 Wall St. reported, citing Mississippi Today. He said the homes could house company workers.
Turbine deadlines and the next steps in court
The turbine count has a deadline. MZX signed a July 30 agreed order with the Mississippi Department of Environmental Quality. It lists 69 temporary turbines and bars new ones after July 15.
Each must retire on a set schedule, and the last 13 must shut down by Dec. 31, 2026. State regulators approved 41 permanent turbines in March.
The order says the temporary units haven’t broken state air permitting rules. A separate NAACP suit under the Clean Air Act is still pending, the Mississippi Free Press reported. The Trump administration has backed xAI in that case, citing national security.
AI power plants are also showing up on electricity bills, and their cost feeds the AI bubble debate. In Southaven, the next move belongs to the federal court. It must rule on the partial motion to dismiss, and on whether the neighbors can sue as a class.
