Arkansas Advocate: Arkansas Explained -- Understanding the data center boom and debate
Data center projects across Arkansas are facing increasing public scrutiny and calls for local regulations despite being hailed as an economic boon. While companies like Google, AVAIO Digital, and Serverfarm are advancing with significant developments, residents and local officials are raising concerns about environmental impacts, resource consumption, and lack of public input. Proposed regulations and even a moratorium are being discussed in Pulaski County and Little Rock to address these issues.
Arkansas is experiencing a surge in data center development, with five projects announced since an overhaul of energy permitting laws last year. While officials and economic developers promote these projects as beneficial, residents and some local leaders are expressing growing concerns. Key issues include the substantial power and water consumption, potential environmental impacts such as noise and wetland destruction, and a perceived lack of public input due to confidential negotiations and non-disclosure agreements.
Major developments underway or planned include AVAIO Digital's initial $6 billion investment in Pulaski County, Google's $1 billion data center in Little Rock and a $4 billion construction in West Memphis, Serverfarm's $8 billion facility in Clarksville, and an unnamed Fortune 500 company's $1 billion project in Conway. Google is also partnering with Entergy Arkansas on a 600-megawatt solar project in West Memphis and has established a $25 million "Energy Impact Fund.
In response to public outcry, momentum is building for new regulations. Pulaski County's Quorum Court has forwarded proposed regulations, drafted by Democratic nominee Wendell Griffen, for a 90-day review. These proposals would mandate public notice, disclosure of utility impacts, and a conditional-use permit process for high-intensity data centers, alongside requiring certification that electrical infrastructure costs won't be subsidized by existing ratepayers. Griffen is additionally advocating for an emergency moratorium on data center construction. Little Rock Mayor Frank Scott, Jr. has also voiced support for city-level regulations for larger data centers, requiring water usage reports and other project information.
The state has attracted these data centers through various incentives, including sales tax exemptions for construction, equipment, and electricity, and the 2025 Generating Arkansas Jobs Act, which allows utilities to recoup new power generation costs upfront. These tax breaks were expanded in 2025, and Governor Sarah Huckabee Sanders has credited them with attracting Google to the state. Additionally, projects in Little Rock and Conway are benefiting from local property tax breaks and reduced franchise fees.