Southaven Police Department took millions from Musk-backed companies. It wanted drones and Flock cameras.

This article was originally published by Mississippi Today.

SOUTHAVEN — Organizations linked to Elon Musk donated more than $3 million to the Southaven Police Department between December and February, as Musk’s SpaceXAI sought approval for a data center in the city amid increasing public hostility toward the artificial intelligence infrastructure boom. 

The donations, which came in two transactions, are part of a wider pattern in which companies and nonprofits affiliated with Musk have donated to public agencies and community organizations in locations important to SpaceXAI’s business deals. 

Southaven residents expressed concern on social media that the donations, made in the same period that SpaceXAI and the city negotiated key aspects of a data center deal, presented a possible conflict of interest. Mayor Darren Musselwhite called this perception “simply just not true.” He said that companies commonly donate to support communities where they operate and that Southaven has accepted only money that helps the community at large.

Since August 2025, Southaven has been home to a gas plant that powers SpaceXAI’s largest data center, Colossus II, just across the state line in Memphis. Southaven residents started complaining about noise and pollution soon after turbines were installed, a concern that has led to at least two lawsuits.

Against this backdrop, Gov. Tate Reeves announced in January that SpaceXAI, then called xAI, would invest $20 billion to build a data center in Southaven, the third for the company and its first in Mississippi. Reeves called it the “largest economic development project in Mississippi’s history.”

In the weeks leading to the governor’s announcement, two organizations linked to Musk donated a combined $3.23 million to the Southaven Police Department.

MZX Tech LLC, a subsidiary of SpaceXAI, sent the city $1.38 million, earmarked for the police department. A donation agreement, signed in February by Musselwhite, contained a “no quid pro quo” clause, acknowledging that “no goods or services were provided in exchange.” 

A city clerk signed a receipt for the gift on Dec. 17, the day after the Board of Aldermen approved a memorandum of understanding between the city and SpaceXAI relating to the Southaven data center. The memorandum shows MZX Tech will separately contribute $3.46 million to the city to widen and resurface roads near the power plant and the developing data center, “due to the use and strain that MZX’s operations will cause and require of the City’s infrastructure.” The city sent MZX Tech an invoice for that amount on Dec. 17. 

In an email, Musselwhite confirmed that MZX Tech made contributions to improve traffic flow. He called the $1.38-million donation an “unrelated transaction.”

A second donation to the police department, for $1.85 million, came from the Musk Foundation, a nonprofit started by Musk and his brother in 2001. A representative from the foundation reached out to the police department late last year offering the grant opportunity, according to Musselwhite. 

“We were made aware that this organization likes to use grant funding to enhance public safety in communities where their ‘for-profit’ companies operate,” Musselwhite said in an email to Mississippi Today. “Public safety grants are not unusual and the City has taken advantage of these for many years.”  

A grant agreement signed by the city finance director on Dec. 29 specified the money would be used to purchase “critical equipment for the Southaven Police Department,” including Flock cameras and an autonomous drone system.

Mississippi Today requested comment from representatives of the Musk Foundation, MZX Tech and SpaceXAI.

The combined $3.23 million in donations are a significant windfall for the Southaven Police Department, which had a $21-million budget in 2024, according to the city’s most recent annual audit. 

The department has since used grant money to buy 13 Dodge Durango SUVs for about $540,000 and a Flock drone system for $250,000, among other spending. The Board of Aldermen also approved the purchase of five Dodge Ram trucks for about $195,000. 

Across the country, Flock has faced widespread criticism for its automated license plate readers, which use high-speed cameras to capture and store billions of license plates a month. 

MZX Tech also approached the city with another opportunity. It wanted a 51-acre lot next to the existing SpaceXAI power plant, a site owned by the city that once housed a police and fire training center. In exchange, MZX Tech agreed to give the city a different plot of land and $40 million for a new training facility, Musselwhite said in an Aug. 18 Board of Aldermen meeting. 

“It was an easy decision to accept this deal,” Musselwhite said in that meeting. “It’s going to be a win-win for the city.”

Residents sued SpaceXAI in June. A few weeks after the class action was filed, Musk announced on X that SpaceXAI would offer half-price Starlink internet to residents of Memphis and the Southaven area. 

These donations and deals differ from fee-in-lieu agreements, where companies looking to establish data centers have signed agreements with local governments to pay lower property taxes as an incentive to invest in their communities. The city of Southaven signed a fee-in-lieu agreement with SpaceXAI for the data center on Jan. 9, the day after the governor’s public announcement. 

The Musk Foundation’s donations to the Southaven Police Department are unusual, given the causes the foundation publicly promotes. 

On its website — which contains just 32 words in plain text — the foundation states that it supports renewable energy, space exploration, pediatric research, science and the development of safe artificial intelligence.

More than three-quarters of the foundation’s donations went to Musk’s own companies in 2024, according to an analysis last year by The New York Times. That year, the Musk Foundation’s largest beneficiary was The Foundation, also known as X Foundation, another nonprofit associated with Musk. 

The remaining donations, such as gifts to MIT and a nonprofit organization promoting girls in robotics, often align with Musk’s scientific interests. Others seem to coincide with his business interests. 

In March 2021, Musk announced on Twitter: “Am donating $20M to Cameron County schools & $10M to City of Brownsville for downtown revitalization.” An hour and a half earlier, a Starship rocket had exploded in Cameron County, Texas, where Brownsville is the county seat. The donations were made through the Musk Foundation. 

Tax filings from 2002 to 2024 show the foundation donated directly to a police department once in that period: $15,000 to the Travis County Sheriff’s Office in Texas in 2024.

The foundation sometimes donated five-figure sums indirectly to police departments through affiliated groups such as the Los Angeles Police Foundation, a private nonprofit. The Los Angeles Police Department has used police foundation money, although not necessarily from the Musk Foundation, to purchase surveillance technology, including from Palantir and Flock. 

Donations made by the foundation from 2025 onward, such as the $1.85 million grant to the Southaven Police Department and any other police department, are not yet public. Southaven Police Chief Seth Kern said several other police departments around the country had also received a grant from the foundation.

In January, the Musk Foundation sent $50,000 to the Memphis Police Association, the union for Memphis police officers, according to the vice president, John Covington, who posted about the donation on Facebook. “Out of the blue, one of Elon Musk’s assistants reached out to the Memphis Police Association,” Covington wrote. “There were no strings attached.”