Microsoft plans to spend $4 billion to build a second data center in Mount Pleasant that it says will be the most advanced AI center in the world.
The new project includes construction of the facility and technology infrastructure, according to a company announcement on Sept. 18.
The latest announcement brings the cost of Microsoft’s Racine County developments to about $7.3 billion, including the $3.3 billion commitment the company made in 2024.
At the time of the initial Microsoft announcement in May 2024, which included a visit from President Joe Biden, the Journal Sentinel reported that the company’s Racine County spending could easily exceed $10 billion, given the huge parcel of land it controls there.
Much of the work is taking place on land previously acquired by the Foxconn Technology Group for a high-tech manufacturing complex that was touted by state and federal officials, including President Donald Trump, as transformational for the state’s economy.
While the Foxconn project failed to live up to its original promises, the infrastructure work to bring utilities to the area helped Microsoft choose the property for this development.
The second Microsoft data center is planning to house part of what the company calls a distributed training supercomputer. Microsoft said the facility will be the most advanced AI data center in the world.
Brad Smith, Microsoft president and vice chair, said when the first data center opens, the facility plans to house hundreds of thousands of the world’s most powerful NVIDIA graphic processing units, which will be critical for the company’s AI development and one of the most unique pieces of technology in the world.
“The data center that you’ve seen rising up in Mount Pleasant goes live early next year, and it will house what is literally, the most powerful supercomputer on planet Earth,” Smith told an audience at Festival Hall in Racine. “In fact that building will have the supercomputer that is 10 times more powerful than any supercomputer anywhere in the world.”
The company plans to build the second largest “chiller,” which is used to cool the technology used in the facility, in the world. The largest chiller is in Qatar, Smith said.
But beyond the constrution and operation of the facility, Smith said the company is helping create a “data center academy” at Gateway Technical College and its partnerships with University of Wisconsin-Milwaukee and Titletown Tech will be critical to training workers and partnering with area small businesses.
Microsoft says the Racine County data center would be the first of several facilities, located in multiple states, in the company’s latest initiative to compete with other technology companies like Facebook’s parent company Meta on artificial intelligence.
Construction of first Racine County data center nearly done
Microsoft is finishing construction on its first Racine County data center, which is to be completed in early 2026. The company says it will hire more than 400 employees to work at the first data center and once the second data center is open, the total number of employees plans to be nearly 800 for both facilities.
Construction for the second data center is to be finished by the end of 2028. Thousands of construction jobs are planned related to the completion of the data center, the company said.
Gov. Tony Evers said the Microsoft investment is “making Wisconsin home of the most powerful data center in the world.”
“We’ve seen the benefits for Wisconsin workers with tens of thousands of construction workers and skilled laborers participating in this project,” Evers said. “This project is creating good family sustaining union jobs across the entire region from carpenters, plumbers and electricians.”
Evers said innovation is part of the state’s tradition and the new AI frontier has been used in different areas like advanced manufacturing, biohealth and personalized medicine.
“That puts Wisconsin on the very cutting edge of AI power, not just in the United States, but across the world,” Evers said. “Thanks to Microsoft’s partnerships, the new Innovation Lab at UW-Milwaukee, hundreds of small and lean-in-size business owners are learning how to use AI.”
Microsoft development watched closely by environmental groups
Data centers require massive amounts of electricity and water. Those demands have stirred international concerns, and Wisconsin environmental groups have raised questions about plans from Microsoft and other companies in the Badger State.
On Sept. 15, Midwest Environmental Advocates, on behalf of Milwaukee Riverkeepers, filed a lawsuit against the city of Racine, which provides water to Mount Pleasant, for documents related to the Microsoft development.
On Sept. 16, the city of Racine released a document showing that the first Microsoft data center would use 234,000 gallons of Lake Michigan water per day and discharge back into Lake Michigan 81,000 gallons per day in 2026.
The document also stated the rest of the expansion could use up to 2,814,000 gallons of water per year with wastewater discharge of 2,031,000.
Smith says Microsoft plans to minimize water use
Smith addressed the water concerns saying, “Lake Michigan has nothing to fear from our data center” and added the company has built data centers in places like Phoenix, Qatar and Abu Dhabi.
“We build data centers in the desert, that’s because we’ve figured out how to run them without using a lot of water,” Smith said adding the company has developed at “closed-loop cooling system.”
The chiller plans to take hot water through a series of pipes, stretching more than 60 miles, and use giant fans, which are 20 feet in diameter, to cool the hot water, which then is piped back into the facility.
Smith said more than 90% of the facility is going to rely on the system that’s circulated continously and the remaining portion will use outside air for cooling and switching to water on days when it’s above 85 degrees.
Smith said the data center has enough fiber cable to circle the Earth four times, and also have a modest annual water use requiring roughly the amount of water a typical restaurant uses annually or “what an 18-hole golf course consumes weekly in peak summer.”
Separate from the lawsuit, Clean Wisconsin conducted an analysis of the power used by data centers in Mount Pleasant and Port Washington stating the facilities could use more electricity than all the houses in Wisconsin.
The first data center uses about 450 megawatts. Microsoft and We Energies have proposed a special rate specific for data centers to minimize impact on local residents.
Smith said Microsoft is “pre-paying for the energy and electrical infrastructure that we’ll use —ensuring prices remain stable and protecting consumers from future cost increases because of our data center.”
“We will match every kilowatt hour we consume that comes from a fossil fuel source one for one with carbon-free energy we put back onto the grid,” Smith said. “This includes a new 250 (megawatt) solar project in Portage County that is under construction to support this commitment. And our partnership with We Energies ensures we will continually explore and add energy transmission, generation, and usage — under transparent tariffs that support grid reliability.”
This story has been updated with additional information.
This story was updated to add a video.
This article originally appeared on Milwaukee Journal Sentinel: Microsoft plans $4 billion expansion of Racine County work for an advanced AI data center
Reporting by Ricardo Torres, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel
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