Microsoft’s Wisconsin Data Center Now A $3.3 Billion Project

A drone photo taken on July 1, 2019 captures a single house on Prairie View Drive that remains in a former subdivision of 13 properties. Most property owners sold to the village of Mount Pleasant, Wis., and their homes have been demolished to make way for the Foxconn plant. A building on the Foxconn site and the Foxconn construction area are seen in the background. Coburn Dukehart/Wisconsin Watch

President Joe Biden and Microsoft President Brad Smith will announce Wednesday at an event in Racine County that Microsoft’s Mount Pleasant data center project is now a $3.3 billion effort that will yield an estimated 2,000 permanent jobs. It also includes a new lab at UW-Milwaukee.

A $1 billion project was first announced by the company in March 2023 for a 315-acre site once targeted for Foxconn and its suppliers. An additional 1,030 acres were added to the Microsoft site in November as part of an expansion of the project to include four separate data center facilities. Construction is already underway on the first data center.

Microsoft is also expected to make several additional investments across southern Wisconsin according to a White House fact sheet and press release from Governor Tony Evers. The company already maintains an office in Green Bay near Lambeau Field as part of its TitletownTech venture capital partnership with the Green Bay Packers.

“Microsoft will partner with Gateway Technical College to develop a Datacenter Academy that trains 1,000 Wisconsinites for datacenter and STEM roles by 2030, and will employ up to 2,000 people in permanent roles at its Racine facility,” says a White House fact sheet.

The announcement is expected to include a heavy emphasis on artificial intelligence (AI) technologies.

“With partnership from TitletownTech and the Green Bay Packers, Microsoft will establish a manufacturing focused AI Co-Innovation Lab on the campus of the University of Wisconsin-Milwaukee, the first of its kind in the United States,” says a press release from Evers. “This lab will connect Wisconsin manufacturers, entrepreneurs, and established companies with Microsoft’s AI experts and developers to design and prototype AI and cloud solutions to improve and accelerate their work and grow their business.”

Microsoft says the “lab will aim to serve 270 Wisconsin companies by 2030, including 135 manufacturing businesses.” The company has six co-innovation labs elsewhere, including two in the United States.

Microsoft is to partner with Milwaukee-based national startup accelerator gener8tor to “train 1,000 business leaders to adopt AI in their operations, so that Wisconsin manufacturers can seize AI’s promise.”

Microsoft is expected to invest the $3.3 billion in the data center project by the end of 2026 according to Evers. The Microsoft and White Houses releases reference 2,300 construction jobs.

Data centers have taken on increased importance with the expansion of cloud computing and the rapid growth of AI services. AI technologies rely on large datasets and require substantial processing power. Microsoft is an investor in leading provider OpenAI, the maker of ChatGPT.

Biden is expected to reference that then-president Donald Trump visited the site in 2018 and publicly championed the now largely-aborted Foxconn project, calling it the “eighth wonder of the world.”

The Taiwanese electronics manufacturer, in a deal with then-governor Scott Walker, announced in 2017 it would invest $9 billion in a factory campus at the site and create 13,000 jobs.

But only a minimal amount of Foxconn development has occurred. The company has approximately 1,000 employees and earned $6.3 million in state tax credits for the 2022 fiscal year. An earlier agreement, renegotiated by Gov. Evers after the company scaled back its plans, would have awarded the company approximately $3 billion.

“The datacenter will be built on the same land as a failed $10 billion investment from Taiwanese electronics manufacturer Foxconn six years ago, which left behind Wisconsin residents and workers,” says the White House fact sheet.

Microsoft has already legally guaranteed a minimum assessed value of $1.4 billion by 2028. The guarantee is intended to assure a minimum property tax revenue level to pay back associated public debt. Foxconn has a similar agreement.

The deal, based on initial reports, appears to be occurring with minimal direct subsidies. But the State of Wisconsin and other partners has already invested hundreds of millions in expanding Interstate 94 and nearby highways, bringing utility services to the site and other site preparation work.

Evers’ release says the Wisconsin Economic Development Corporation is expected to award a $500,000 grant to support the UWM lab and an additional $500,000 grant to assist Titletown Tech in opening a Milwaukee office at the lab.

Additional infrastructure investment is planned to accommodate Microsoft’s specific plans. We Energies is advancing a $335 million electrical distribution project.

Microsoft has several Wisconsin connections in its current leadership. Smith, the Microsoft president and vice chairman, was born in Milwaukee and grew up in Appleton. Chairman and CEO Satya Nadella holds a master’s degree in computer science from UWM.

“Microsoft will partner with United Way Wisconsin, United Way Racine, and other community partners, to upskill more than 100,000 people across Wisconsin by 2030 on generative AI. This curriculum will help train residents to use new applications, including Microsoft Copilot, a suite of Microsoft AI services that enhance productivity and creativity,” says the company’s press release. “In addition, Microsoft will work with Gateway Technical College to train and certify 3,000 local AI software developers and provide opportunities for 1,000 local business, civic and government leaders to participate in immersive bootcamps where they can learn how to effectively adopt generative AI into their organizations.”

The publicly-traded company has a $3 trillion market capitalization and more than 200,000 employees.

Look for more coverage by Urban Milwaukee on the announcement and on Biden’s visit to Gateway Tech in Racine County later today.