Microsoft announces new $4B data center plan in Racine County
Microsoft has announced plans to invest $4 billion in a new data center project in Racine County, Wisconsin, adding to the over $3 billion data center currently under construction in nearby Mount Pleasant, expected to be completed by early 2026. The second data center is anticipated to be finished by 2028. This expansion is part of a growing trend, with six large data center projects underway in Wisconsin, including a major facility by Vantage Data Center expected to become the largest energy consumer in the state’s history.
While data centers support the increasing demand for cloud services and technological infrastructure, concerns persist regarding their impact on local energy consumption, potential rises in consumer energy bills, and the relatively limited number of long-term jobs they generate. Wisconsin has offered tax incentives such as sales tax exemptions on construction materials and electricity, as well as property tax benefits, to attract these investments.
Microsoft emphasizes that these projects create new job opportunities and skill development pathways for local residents, including partnerships with educational institutions like Gateway Technical College. However, the surge in energy demand is driving discussions about new energy sources, including nuclear power, to meet future needs. Public opposition is notable, with many voters displeased about data center construction in their communities and the tax incentives offered to these companies. Additionally, several states are reportedly losing substantial tax revenue due to such incentives.
Microsoft announces new $4B data center plan in Racine County
(The Center Square) – Microsoft announced Thursday it intends to build a $4 billion data center in Racine County in addition to the more than $3 billion data center it is currently building in Mount Pleasant, which is expected to be completed in early 2026.
The second data center is expected to be completed by 2028.
Data centers are becoming increasingly necessary as cloud-based memory and computing capabilities increase but tax incentives for those centers are questioned due to the lack of long-term jobs at the sites, the energy needs and the potential increase in consumer energy bills that accompany those data centers.
The new announcement would mean that six large data center projects are in the works in the state with Vantage Data Center in Port Washington set to be the largest energy user in Wisconsin history with Vantage asking for 1.3 gigawatts of energy to be available by 2027 and ultimately 3.5 gigawatts of power.
Wisconsin exempted sales tax on materials used to build the data centers and the electricity used at the data centers in the last budget cycle and have passed legislation to provide tax increment financing exceptions for several of the current slate of data centers in order to allow those companies to retain any property taxes from the increased value of the property after the data center is built.
Wisconsin Gov. Tony Evers’ office said that construction of the Mount Pleasant data center has included as many as 3,000 construction workers during peak operations.
“But what does that mean for the average Wisconsinite? It means new jobs, new skills, and new opportunities — right here at home,” Microsoft Vice Chair and President Brad Smith wrote. “From union construction roles to long-term careers in operations and IT, this facility is creating pathways for Wisconsinites to be part of the future of technology.
“It means students at Gateway Technical College can train for high-demand roles through Wisconsin’s first Datacenter Academy. It means local companies — from manufacturers to startups — can partner with Microsoft engineers to turn AI ideas into real solutions.”
That demand for power for these data centers is leading to both a push for new and reliable energy sources for the future – including a nuclear siting plan – and projections that the average American’s energy bill could increase from 25% to 70% in the next 10 years without intervention from policymakers, according to Washington, D.C.-based think tank the Jack Kemp Foundation.
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Voters across the U.S. have said they don’t want data centers built in their community and even more oppose the data centers if tax incentives are awarded to have them built, according to a recent poll by Libertas Network.
A least 10 states are currently losing $100 million or more in taxes from data centers, according to an April report from Good Jobs First.
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