American South West is Vast expanse. Depends on how you count it too. If DFW, Austin, San Antonio count as American South West for that 20% number, which is arguable, the Phoenix location does not make sense.

Phoenix datacenters are largely a SoCal play, the cost of investing in SoCal versus on the other side of the border with tax incentives a bit more business friendly environment and near zero land costs (compared to Coastal California metro).

When it comes to water management, the desert towns like Las Vegas, Phoenix do a far better job than coastal cities.

note: 80% of American population lives East of 98th parallel, that is roughly East of I-35 and majority of the remaining 20% is along pacific coast.