SpaceXAI offers 50% Starlink discount to placate data center neighbors; 2,000 have signed up — goodwill gesture comes amid vociferous community backlash

Amid growing community backlash, SpaceXAI offered a 50% discount to anyone living near its two data centers in Memphis, Tennessee, and claimed that thousands have already taken advantage of the promotion. Aside from the discounts offered to residents of the city and neighboring Southaven, Mississippi, SpaceXAI Memphis said in its X post that it’s also waiving the upfront hardware cost for the recently launched Starlink V5 rental kit across all plans, saving users up to $349 in one-time costs.

Critics say that Elon Musk is simply making this move to buy goodwill with his neighbors, especially as his data centers have been in hot water over the deployment of unpermitted turbines to deliver much-needed power. “Communities in Memphis and North Mississippi aren’t asking for discounted internet service,” SELC Senior Attorney Amanda Garcia told PCMag. “They’re asking xAI to shut down its illegal, unpermitted power plant that continues to pump out staggering amounts of harmful (sic) pollution, including smog-forming nitrogen oxides, fine particulate matter, and hazardous chemicals like formaldehyde.” While SpaceXAI has since promised to remove all 69 of its unpermitted generators, it says it will do so only over a span of one year as its 1.2 GW power plant comes online to replace them.

Starlink residential plans are available in three tiers: 100 Mbps for $55 a month, 200 Mbps for $85 a month, and Max for $130 a month. Residents who subscribe to any of these plans could get them for just $27.50, $42.50, or $65, respectively, resulting in massive savings. This makes the cheapest Starlink plan more affordable than other internet service providers like AT&T and Xfinity, whose plans often start at $35 to $40 per month.

However, those competitors offer fiber-based connections with speeds up to 300 Mbps, meaning users would be getting a downgrade if they switch over. However, some users in the r/memphis subreddit commented that this is a great option for areas of Memphis and Southaven that still lack fiber access, and it could also be a useful backup for those who need reliable internet service. There were also several complaints about outrageous fees from other options, which drive their internet costs well above $40, making the $27.50 monthly fee for the 100 Mbps Starlink plan a tempting option. Interestingly, the company is also offering the same discount in Vermilion Parish, Louisiana, where SpaceX plans to build its new spaceport.

While the company’s social media post makes it seem like 2,000 is an achievement, it’s still a small number relative to the city’s total population. The latest U.S. Census Bureau estimates that Memphis alone has a population of over 600,000 people and more than 250,000 households. That means the new subscribers account for less than 1% of the total homes in the city. Aside from that, SpaceXAI’s latest earnings report says that it has more than 12 million subscribers, so the 2,000 new subscribers from the city are just a drop in the company’s massive bucket of Starlink users.