Google, state and local officials mark start of $4 billion AI data center in West Memphis

This article was originally published by Arkansas Advocate.

WEST MEMPHIS — Internet giant Google officially announced the first phase of its West Memphis cloud and artificial intelligence data center project Thursday in what officials called one of the largest economic investments ever in Arkansas.

West Memphis Mayor Marco McLendon lauded the $4 billion investment through 2027, located on 1,100 acres just 15 minutes from the Arkansas-Tennessee state line, as being transformative for his city. The Thursday announcement was “the biggest day” in “Best” Memphis history, he declared, while calling it the start of a “Digital Delta West.”

“This project is more than just jobs, buildings and technology,” McLendon said. “It’s about the future of our city, opportunity, investment and education.”

Ruth Porat, the president and chief innovation officer of Google’s parent company Alphabet as well as the search giant itself, said the project would support “thousands” of construction jobs and hundreds of permanent roles once construction is complete.

Entergy Arkansas — not West Memphis’ electric utility — will provide power to the facility via a solar array and existing power generation, and each speaker addressed electricity use and the effect on ratepayers in their remarks.

Porat emphasized the efforts taken by Google to “keep rates down for ratepayers,” while Entergy stressed in a written statement that “large customers” helped drive prices down for everyone. However, some experts have worried data centers built as a result of the AI race could contribute to already-ballooning power bills thanks to how utilities spread costs across their entire customer base. Rising energy costs currently outpace the rate of inflation.

Andrew Marsh, president of Entergy Arkansas’ parent company, Entergy Corp., said there would be “$1.1 billion in benefits for existing Entergy Arkansas customers over the life of its contract with Google. Google said in a press release distributed afterward that its agreement with Entergy was “designed to put downward pressure on electricity rates for Entergy Arkansas customers.”

During media interviews after the announcement, Entergy Arkansas CEO Laura Landreaux would not specify the term of the contract, only saying that it was “decades.”

Porat also said Google would invest $25 million in an “Energy Impact Fund” to implement local energy efficiency initiatives in West Memphis “while protecting affordability.” That is in addition to implementing “load flexibility” — or throttling back the amount of power used by the facility during times where the power grid is being strained, similar to agreements Entergy has reportedly struck with many cryptocurrency mining operations in the state, which are also large electricity consumers.

“The goal there is to best support access for citizens and businesses when power needs surge,” Porat said.

Gov. Sarah Huckabee Sanders touted the passage of the Generating Arkansas Jobs Act during the 2025 session, saying it would cut down on permitting timelines for new power generation and provided tax credits to lure Google to the state. Critics of the bill have said it reduces oversight over utility companies and allows them to recoup costs from customers on utility projects that haven’t been built yet.

“This will help Arkansans continue to enjoy some of the lowest electric bills in the nation, and one of the things that helped push this project forward,” Sanders said.

Google’s investment includes the costs of a solar panel facility that both Entergy and Google say will be funded entirely by the Silicon Valley behemoth — although Entergy has filed for a strategic investment rider before Arkansas’ Public Service Commission for the project. Entergy said in a written statement that Google would cover the “full energy costs” of powering the data center.

A rider is a charge separate from a utility company’s baseline rate it charges its customers to recoup the costs of projects like new power generation facilities.

When asked, Entergy Arkansas spokesperson Matt Ramsey said the reason for this was the complex regulatory framework utilities operate under, but he did not provide further details about whether the costs of the facility would trickle down to regular customers. When asked for clarification, Entergy said savings from its contract agreement with Google would go to customers.

“Entergy and Google entered into a contract through which Google will pay for the costs necessary to serve them, including Cypress Solar, and those payments are recovered through their contract charges.  Those payments will offset EAL’s costs in its other rider recovery mechanisms,” Ramsey wrote in an email.

McLendon also alluded to another data center project located just on the other side of the Mississippi River in Memphis — the Elon Musk-owned xAI supercomputer facility, which powers Grok and has earned the ire of locals and the NAACP for its use of natural gas turbines to generate power, which they say are harming their health.

“We also accomplished this goal of this project without using any gas turbines, so our air quality out here is going to be complete. No worry,” McLendon said.

Google applied for a Clean Air Act major emissions permit in West Memphis on Sept. 25 from the Arkansas Division of Environmental Quality. A Google spokesperson said in an email the permit was for backup generators, and were only for use in “the rare and unlikely event that the grid goes down.”