By Jennifer Hiller | Photography by Rory Doyle for WSJ

HOLLY RIDGE, La. -- Manufacturers have passed over this patch of farmland for nearly two decades, a string of setbacks that left this one of the poorest corners of Louisiana.

A quarter of the 20,000 residents in Richland Parish live in poverty. Farm jobs dwindled when agriculture became more efficient, forcing people to move away for work. Hopes for an auto manufacturing plant later went bust.

Now, the community is hoping for a new savior: AI.

Meta Platforms scooped up 2,700 acres of farmland last year for what would be its largest-ever data center, built over flat rice fields 45 minutes west of the Mississippi River.

At 4 million square feet, or 70 football fields, Meta's data center will cost $10 billion and sit on more acreage than Louisiana State University in Baton Rouge, which has more than 34,000 students.

Building advanced artificial-intelligence systems will take city-sized amounts of power, which has turbocharged electricity demand projections for the first time this century.

Tech companies are pressing into unexpected parts of the country, far from traditional data-center markets such as Northern Virginia. They are hunting for huge swaths of flat land with access to natural gas and transmission lines, landing them on the doorstep of oil-and-gas country, including Louisiana's Haynesville Shale.

Other matchups between tech and natural gas are emerging from North Dakota to West Texas, where the first site for the Stargate venture -- a new $500 billion AI infrastructure initiative -- will feature on-site natural gas-fired power. Exxon Mobil and Chevron are getting into the electricity business to power AI, too.

Meta Chief Executive Mark Zuckerberg has boasted about his project on Facebook and Instagram. He says the site will be used to train future versions of Llama, Meta's collection of open source AI models and be "so large it would cover a significant part of Manhattan." A site footprint he shared covered more than 5 miles, shading an area that would stretch from Central Park to SoHo.

To meet the voracious power needs of the project and other growth, Entergy's Louisiana business intends to spend about $3.2 billion to build three natural gas-fired power plants, tapping the state's vast gas reserves. If approved by state regulators, two plants would be built near Meta's site, which is already crossed by transmission lines and a gas pipeline.

In Holly Ridge, an unincorporated community with one blinking traffic light, hundreds of pieces of construction equipment are rolling across rice stubble left from the fall harvest. Eventually 5,000 construction workers will arrive.

The financial rewards -- and risks -- are enormous. Meta will bring money, jobs and local tax revenue. But concerns are mounting that the project also threatens to burden electricity customers across much of Louisiana with higher costs if demand from the tech giant eventually dries up.

A huge gamble

Gregory Upton, executive director at LSU Center for Energy Studies, estimates Meta could use 15% of Louisiana's current electricity generation.

That is worrisome to other utility customers largely because of the mismatch between the 40-year to 50-year lifespan of gas-fired power plants and Entergy's 15-year deal with Meta. They don't want to be on the hook for the infrastructure.

"They want to use ratepayer money to finance something that they currently only really say they want for 15 years," said Logan Atkinson Burke of the Alliance for Affordable Energy, an advocacy group for residential customers.

Industrial companies, which make up roughly half of Louisiana's electricity sales, are voicing their concerns to Mike Francis, one of five Louisiana utility commissioners.

"We hear about this constantly," Francis said, noting someone must guarantee the payments on new projects for about 30 years.

"Guess who?" Francis asked. "It's going to be the ratepayers."

Commissioners will consider Entergy's request later this year, but Francis says Meta's investment is likely worth the risk of stranded assets down the line.

That gamble came to the forefront in January when Chinese startup DeepSeek stunned Silicon Valley with powerful AI models built more cheaply and using less power than American equivalents. Since then, investors have questioned AI spending, though the spigots remain open so far.

Entergy says in filings that the arrangement with Meta "attempts to minimize" rate impacts and could lower costs for others.

"There's a number of things that we are working with Meta on to try to manage this concern," said Drew Marsh, CEO of Entergy. "They want to be good neighbors too, and so they are helping us by essentially picking up the costs that they are causing."

The world is changing

Meta's permanent jobs -- around 500 -- are fewer than the thousands that might have accompanied an auto factory. For a parish with a median household income around $53,000, the impact is expected to be meaningful, though. Average salaries at Meta are projected at $82,000, according to an Entergy filing.

Jesse Washington, mayor of nearby Delhi, said he hopes to see locals hired by Meta and the construction of more permanent housing, rather than here-and-gone trailers.

"Those are the types of things I stay up at night, when everybody else is asleep, thinking about," Washington said. "How can the town of Delhi grow from Meta?"

Internal discussions at Meta about the need for a massive site began in late 2023, when the company was already facing a shortage of locations that met its needs. The Holly Ridge project is about 10 times the size of a typical Meta data center.

"I'd argue it's probably the most important project we've undertaken," said Brad Davis, Meta's director of data center community and economic development.

To woo Meta last year, Louisiana lawmakers approved a sales-tax exemption for data-center equipment, an incentive available in most states with large data-center markets. Louisiana also needed more land.

Susan Bourgeois, secretary of Louisiana Economic Development, called Scott Franklin, whose grandfather sold 1,440 acres of rice fields in Holly Ridge to the state in 2006 when Louisiana was chasing auto factories. Bourgeois said a company wanted more.

"What could be that big?" Franklin recalls thinking. He eventually sold close to 1,300 acres directly to Meta.

Bourgeois said rebuffing Meta would be foolish.

"The world is changing faster than any of us can predict," Bourgeois said. "It feels a little silly today to fear too much power, that we think we'll be at a place in 20 years where we'll say, 'Oh no, we have access to too much power.' "

Write to Jennifer Hiller at jennifer.hiller@wsj.com

(END) Dow Jones Newswires

March 30, 2025 05:30 ET (09:30 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.