SpaceX just passed Amazon. It's now one of the most valuable companies on earth.
Days later, the government stepped in to defend the AI plants behind that rise.
The NAACP sued in April over xAI. That's the AI lab Musk now runs inside SpaceX.
The two merged back in February. The fight now is about power.
xAI runs dozens of gas turbines to feed its data centers. The suit says it skipped the right permits.
The turbines also burn methane. They give off smog and fine soot.
That can raise health risks and leave a bad smell. Locals have protested the site for over a year.
On June 15, the DOJ jumped in. It asked the court to throw the case out.
Then it went further. It accused the NAACP of threatening "American national, economic, and energy security."
The claim is that the suit would cut power to AI the military leans on. That's a rare move, since the government almost never takes the company's side in a pollution fight.
We unpack the market moves that actually matter in Market Briefs - five minutes each morning, and you get a free investing masterclass when you join.
xAI built Grok to take on OpenAI, Anthropic and Google. A government version is now in use.
In the filing, the Pentagon's AI lead called Grok "a matter of paramount national security." He said a military version helped U.S. forces hit 2,000 targets in 96 hours.
That was during the war in Iran. The data centers behind it are called Colossus.
They sit in and around Memphis. They run hot, loud and thirsty.
That's the whole reason for the fight. Critics aren't sold.
Lawyers in the case call the DOJ's move a "massive power grab." An NAACP director said polluting firms shouldn't profit at the cost of Black communities' health.
Here's the tension for investors. The plants fueling SpaceX's value also create its legal headache.
SpaceX hit a $2 trillion market cap at its Friday debut. By Tuesday it had passed $2.65 trillion and topped Amazon.
A big part of that is compute. SpaceX now rents data center space to Anthropic and Google.
That makes it a key tech stock in the AI boom. The same turbines drawing federal cover are drawing protests.
Residents near the Mississippi site sued this month over constant noise and shaking. They want it to stop.
The NAACP wants the court to pause the turbines until a judge rules. Its lawyers warn the move would give the government "veto power over citizen suits."
There's a bigger backdrop, too. A Gallup poll in May found 7 in 10 Americans don't want AI data centers near them.
SpaceX hasn't commented on the suit. For now, it has the government making its case in court.
If you want this kind of read on the market every weekday morning, join the free Market Briefs newsletter and get a 45-minute investing course thrown in as a bonus.
