Arkansas lands $6B data center deal
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Servers in a $4.6 billion data center in Sydney, Australia. Photo: Brent Lewin/Bloomberg via Getty Images
Connecticut-based Avaio Digital Partners said Monday it will invest $6 billion to build a data center to power cloud computing and artificial intelligence near Little Rock.
Why it matters: The project will be the largest first-phase private investment in state history, according to Gov. Sarah Huckabee Sanders' statement in a news release.
- More than 500 permanent jobs are expected to be created through 2031.
State of play: Full build-out of the site will cost up to $21 billion, Avaio said. The center will be built on a 760-acre site in an unincorporated area outside Wrightsville, roughly 10 miles south of Little Rock.
- Construction on Phase 1 is scheduled to begin during this quarter, with operations planned to begin in June 2027.
Stunning stat: It also will require an enormous amount of power. Avaio will contract with Entergy Arkansas for 150 megawatts of electricity — roughly equal to the energy use of Palo Alto, California, in 2023.
- The company expects power demand to increase to 1 gigawatt as the facility grows, roughly the peak demand of cities like San Francisco or Oklahoma City.
The big picture: As artificial intelligence investments boom, nearly 3,000 new data centers are under construction or planned across the U.S. — adding to the more than 4,000 already in operation.
- Google broke ground on a $4 billion West Memphis data center in October.
- Big Tech and many local leaders are full steam ahead on building as many data centers as possible to generate revenue and power the AI boom — but they're fueling a major political fight, with locals pushing back over energy use and other concerns.
What they're saying: "Because of Arkansas' favorable position on power, land, teamwork from state and local stakeholders and a can-do business climate, we are experiencing unprecedented growth," Arkansas' Secretary of Commerce Hugh McDonald said in the release.
- McDonald retired from Entergy Arkansas as its president and CEO in 2016.
What we're watching: Some critics wonder if the amount of electricity and water used by the new sites will justify the number of jobs created.
- Some also worry that utility rates for consumers will increase due in part to Act 373, which restructures how electric and natural gas utilities build, finance and recover costs for large projects.
- Entergy Arkansas has stated that its agreement with Google was "designed to put downward pressure on electricity rates for Entergy Arkansas customers."