Contractor Sues SpaceXAI for $432.5 Million in Unpaid Data Center Construction Wages

Darana Hybrid Inc. has filed a lawsuit against SpaceXAI, alleging $432.5 million in unpaid wages for its role in rapidly constructing data centers at four sites in Mississippi. The lawsuit, filed on August 6, seeks $136.8 million in damages.

SpaceXAI has filed a countersuit against Darana Hybrid and its CEO, Darryl Cuttell, claiming he engaged in a fraud scheme to fund "out-of-scope work on hot rod projects." SpaceXAI asserts that Darana Hybrid withheld payments to vendors and suppliers to pressure SpaceXAI into paying. The company is seeking at least $500 million in damages from Darana Hybrid.

Cuttell stated that his company had a strong relationship with xAI before its merger with SpaceX, but payments ceased after the merger. He also noted that his plans to renovate Memphis Motorsports Park, which he renamed Darana Motorsports Park, are now on indefinite hold due to the financial dispute.

In a separate legal matter, SpaceXAI was sued by the NAACP and Southern Environmental Law Center over the use of unpermitted gas turbines at its Colossus data center in Memphis, Tennessee. The Department of Justice supported SpaceXAI in this case, deeming the turbines critical for "national, economic, and energy security." SpaceXAI announced in late July its intention to remove the 69 permit-less gas turbines and transition to 1.2-gigawatt natural gas power plants for its data center energy needs, with full removal expected by next July.