Not long ago, politicians and local officials began calling a huge piece of Racine County property — formerly farmland and suburban homes in the village of Mount Pleasant — “Wisconn Valley,” a nod to Silicon Valley.
The centerpiece of this vision, announced in 2017 and heralded by then-President Donald Trump, was supposed to be Foxconn, a high-tech manufacturing company based in Taiwan. For $3 billion in state tax credits, southeastern Wisconsin would get 13,000 new jobs that paid decent factory wages. Since then, Foxconn dramatically scaled back its plans, agreed to far lower tax credits, and about 1,000 people are said to be doing contract assembly work.
Now there’s a new tech project slated for the area, a Microsoft data center. Microsoft’s land will take up 1,347 acres so far. That’s more than 2 square miles. The first stages of the massive complex are under construction just east of Interstate 94 near where the highway crosses Braun Road and will take years and billions of dollars to develop.
In May, Microsoft announced it would spend $3.3 billion by 2026 to build a first phase of the project. That amount could be ultimately be three times that amount, and the company continues to buy additional parcels in the area.
At the project's launch in May attended by President Joe Biden, Microsoft Corp. president Brad Smith said the company understands the importance of forging positive relationships with communities where it builds projects, and said the data center will “under promise and over-deliver.”
But the data center will have far fewer jobs than even the scaled-down Foxconn operation nearby. State and local officials celebrated Microsoft’s massive investment, and the state extended a sales tax exemption for the project. The plan has stirred new tension between Mount Pleasant and the City of Racine, which originally collaborated to assemble more than 1,000 acres of land into the Foxconn industrial park and build crucial water and sewer systems.
There also are deep concerns about the power and water demands tied to the Microsoft project, which is one of the largest data centers now under construction in the U.S. Such data centers are being built throughout the world as part of the next generation of technology with artificial intelligence at its core.
Here’s what to know about the Racine County project.
Data centers help power everyday technology
Most people think of data centers, collectively, as “the cloud.” If all data centers suddenly went dark, you'd quickly notice — you couldn't stream movies, use online documents, or access social media, for example.
Behind the scenes, though, the cloud is a real place — or real places. Each data center is a collection of thousands of computers, across one or more buildings. Data centers typically have no windows, and they’re surrounded by a high-security fence or wall. Buildings are connected to the outside world by fiber-optic cables that crisscross the country and the globe.
Thousands of data centers exist in the U.S., run by companies including Microsoft, Meta, Amazon and Google. Microsoft operates more than 300 in 34 countries, and built its first in 1989 in Redmond, Washington.
In the U.S., data centers are clustered in northern Virginia, Georgia, Washington, Oregon and Texas. Large facilities, like the one Microsoft plans for Mount Pleasant, are known as "hyperscale" in industry terms.
Data center expert Aaron Wemhoff said that location is crucial.
"There are definite issues with data centers getting the resources they need to function without impacting everyone else around it," said Wemhoff, an associate professor of mechanical engineering at Villanova University.
How many people will work at the Microsoft data center in Mount Pleasant?
Microsoft said it expects about 300 people to be working at the site by 2026 — a mix of contractors and permanent staff. The company has said the number of jobs could ultimately grow to about 2,000. Permanent jobs at data centers include a variety of roles, from security guards to technicians and engineers.
Most average-size data centers operate with just a few dozen people. The state of Virginia tried to study economic impact of the industry. The state's report said "data centers continue to become more efficient through automation, which means fewer jobs are necessary." The state ran into industry pushback when it tried to impose a threshold of 50 employees on new data centers.
"Politicians tend to romanticize the investment," said Nicolas Diaz, an architect and PhD candidate in Chile, where data centers have proliferated and activist movements have sprung up to oppose them due to their water consumption. Diaz works with a collaborative of researchers called FAIR to study AI's impact.
Why is Lake Michigan water so important to the new Microsoft site?
If you've ever felt your laptop or phone get hot to the touch, you've experienced a basic fact about computers: they heat up. When there are thousands of servers packed into a warehouse-like building, it's important to keep equipment cool so that it continues to work. For some data centers, that means industrial-sized fans or air-cooling technology. Other data centers use evaporating water to cool the interior of the warehouse, much like a giant swamp cooler. Some use both. Microsoft's data center in Mount Pleasant will use both air- and water-based cooling systems, although the company has declined to provide details about the design of the system.
Researchers are racing to find ways to reduce the water consumption of data centers, especially when it comes to artificial intelligence, which uses chips that need more cooling power. Microsoft’s own work to reduce water usage is cutting-edge.
If Microsoft’s new data center uses methods similar to other facilities, it will likely use millions of gallons of water each day, but it's unclear exactly how much. Foxconn was approved to use 7 million gallons of Lake Michigan water per day, returning a portion of that to the lake.
How might Microsoft's data center affect the surrounding area?
Innovative tech firms have transformed parts of Wisconsin before. For example, Epic Systems, which makes medical software, has fueled vibrant growth since 2002 in Verona, outside Madison.
But it's unclear how Microsoft's new data center will change the surrounding area, because it will involve far fewer workers than a company like Epic, which employs about 13,000 people.
The Microsoft development could even hurt the city of Racine, Mayor Cory Mason said.
"Instead of having people move to the area to live and work, what you've got is a lot of resources being put into that technology zone, which is having some firms disinvest from the city of Racine to move closer to that zone,” he said. “It's really a deal that backfired on us."
Mason said the data center and similar development will entrench patterns of segregation and poverty by concentrating funds in the suburban part of the county — not unlike discriminatory practices known as redlining, which kept Black Americans from accessing real estate wealth in the 20th century.
The city is intensely segregated, Mason said, and the data center won't provide regional gains that could be more fairly spread out.
"This Microsoft deal is redlining in the 21st century," Mason said. "It virtually ensures that low-income folks and impoverished folks are going to remain segregated and lower class."
How much electricity will the data center use?
The U.S. Department of Energy says that data centers are energy intensive, using 10 to 50 times the energy per floor space of a typical commercial office building.
Microsoft has declined to share how much power the site is projected to use, and information about costs has been kept out of public documents for now.
Despite the electrical infrastructure already extended to the site, there’s more left to be built. The Citizens Utility Board customer advocacy group has asked the Public Service Commission to cap project costs. Microsoft has said in a letter to the Public Service Commission that the company is committed to “paying its own way.”
“The devil is in the details,” says Tom Content, executive kdirector of Citizens Utility Board of Wisconsin, and specifics haven’t yet been released.
Building new infrastructure could mean cost increases for consumers, says Content.
Two new gas-fired power plants are now requested for the region. We Energies is asking for 1.3 gigawatts of new gas generation. One gigawatt can power 100 million LED bulbs, or 9,000 electric cars. That's enough energy to power about 950,000 homes.
These plants are needed in part because of growing energy demand in the region from data centers, said Ciaran Gallagher, energy and air manager of the nonprofit Clean Wisconsin.
The new power generation is related to “economic growth in the I-94 corridor. Microsoft is a big part of that,” said Dan Krueger, executive vice president of planning at WEC Energy Group.
This energy use is also a point of contention for environmental advocates such as Clean Wisconsin. "Data centers, including this Microsoft one, can be low carbon, but only if new renewable energy, new wind and solar, is built to supply that new demand," Gallagher said.
We Energies is scheduled to close older coal plants, which will reduce the grid’s carbon footprint, and Krueger says that the new natural gas plants being proposed will run only 10% to 20% of the time. “We have some of the most aggressive CO2 reduction targets in the country,” Krueger says.
Microsoft has said some energy will come from renewable sources such as solar power.
Climate change is contributing to a wide range of problems, including much stronger hurricanes and tornadoes, and life-threatening temperatures. In Wisconsin, climate change has already contributed to more dangerous and damaging floods. That includes property-damaging flash floods along the North Branch of the Pike River, which is part of the watershed adjacent to the new data center site.
Based on available information from the company, data center expert Wemhoff believes that Microsoft is doing a good job of using natural resources wisely. “They appear to be one of the most responsible companies in the industry regarding the impact of data centers on the environment," he said.
What can we learn about data centers from other areas?
In Northern Virginia, a corridor known as Data Center Alley has replaced longstanding horse farms and rolling pastures, and is now within a stone's throw of Gettysburg, a national park and historic site.
Towns and locals can learn a lot from what's happened there, said Julie Bolthouse, director of land use for the Piedmont Environmental Council in Virginia.
"The amount of power that they're asking for, the transmission lines and substations — it's a whole new world, and we need to be asking questions we didn't used to ask," Bolthouse said.
The area’s energy utility, Dominion, plans to build eight new “peaker” plants, or natural gas-powered plants that will fire up when demand is high, such as on a hot summer afternoon. Virginia has planned for a zero-carbon grid, and this decision has flummoxed climate activists.
Bolthouse also points to hidden risks that towns should be ready to address. For example, police and fire departments should be ready to handle potential emergencies at the site, and navigate the center’s labyrinthine corridors. Or if a data center powers up its diesel backup generators — sometimes dozens — the fumes could affect sensitive groups.
As part of its extensive commitment to reducing its climate footprint, Microsoft has a goal of moving away from diesel backup generators by 2030, and its fact sheet about the Mount Pleasant data center says it will use a “renewable biofuel” for this purpose.
The U.S. Department of Energy may play a role in planning for data centers and energy use. On Aug. 12, it released a brief with a range of strategies for planning and mitigating the spike in energy demand.
Will more tech companies build data centers in Wisconsin?
There are already many data centers in the Midwest. The Great Lakes region is one of the world's most important sources of freshwater, and other data center clusters are currently located in areas such as Arizona, Georgia and Texas that are hotter and drier. That means the Midwest is becoming even more attractive to tech companies, as they seek the plentiful water and land in Illinois, Michigan and Wisconsin. In late March, media outlet The Information reported that Microsoft and OpenAI were planning a $100 billion data center dedicated to AI, and that it would be built within the U.S., but the exact location has not been announced.
The potential for future data centers is part of why Mason is raising concerns now, before the area builds additional infrastructure.
Mason said: "There's a lot of land available here. There's a lot of water available here. There's people who want to work hard to achieve the American dream. If we do this right, everybody wins."
Mason notes that the city, particularly its Black residents, has long endured large disparities in employment, wages, wealth and health, when compared to nearby areas such as Mount Pleasant that are wealthier and mostly white.
"The hope and promise of the Foxconn deal was to shrink that disparity," Mason said. "There is no reason for us to have that kind of disparity when one of the richest companies in the world is investing billions of dollars here.”
Lindsay Muscato was a 2023-24 fellow with the O’Brien Fellowship in Public Service Journalism at Marquette University. Marquette University and administrators of the program played no role in the reporting, editing or presentation of this project.
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