Microsoft to invest $4B to build second data center facility in Wisconsin – News

Microsoft Corp. today revealed plans to spend $4 billion building a second data center in Wisconsin, having already begun construction on an initial facility nearby that’s set to cost about $3.3 billion.

At a town hall meeting in Mount Pleasant, Microsoft President and Vice Chairman Brad Smith told residents that the company is planning to buy hundreds of thousands of Nvidia Corp.’s latest Blackwell GB200 graphics processing units to equip the first data center for artificial intelligence workloads.

Smith, who spent part of his childhood in the town, reassured residents that they won’t have to start paying more for their electricity bills because of the company’s presence there. He explained that it will replace whatever fossil fuel-based energy it consumes from the grid with carbon-free renewable energy sources.

“I just want you to know we are doing everything we can, and I believe we’re succeeding in managing this issue well,” he told attendees at the meeting.

Microsoft has already secured some of its energy needs from a solar farm that’s currently being built around 150 miles northwest of the new data centers, Smith said. It will provide about 250 megawatts of power annually, though the two data centers together will probably need more than 900 megawatts, so it will also need additional energy sources.

Still, the data centers should be easier on the environment than the manufacturing plant that was originally slated to be built on the site of the first one. Earlier, Hon Hai Precision Industry Co., Ltd., also known as Foxconn, had revealed plans to construct an enormous factory at the site, which would have consumed about 7 million gallons of water per day. The project was later canceled.

According to Smith, Microsoft’s first data center will use just 2.8 million gallons of water per year when it comes online in 2026, as its cooling systems can continuously recycle much of what they use. The second data center will use a similar amount, he added.

The project will also create more jobs in the community, Smith said. The first data center will require around 500 full-time employees, and that number will grow to about 800 when the second one comes online. In addition, more than 3,000 construction workers were working on the first facility at the peak of its building phase.

Microsoft and other cloud infrastructure providers such as Amazon Web Services Inc., Google LLC and Oracle Corp. have been racing to build out their data center capacity, not only in the U.S. but also globally, due to the growing demands for AI models. OpenAI claims that ChatGPT alone has more than 700 million users worldwide, and it runs almost exclusively in Microsoft’s Azure cloud data centers.

Hundreds of other tech companies, such as Salesforce Inc., Adobe Inc., ServiceNow Inc. and Box Inc., have been adding generative AI features to their products too, and many of these draw on AI models powered by cloud providers.

The Wisconsin data centers will help to fulfill that demand. In a post on X, Microsoft Chief Executive Satya Nadella said the first facility “will deliver 10x the performance of the world’s fastest supercomputer today, enabling AI training and inference workloads at a level never before seen.”

The second data center is slated to come online in 2027 or later, and will be on a similar scale to the first, Smith said. “We did pause to think through exactly what we would build for phase two, and how we would build it,” he added.

Once the second facility is complete, the state will be home to more GPUs than any other, said Wisconsin’s Democratic governor Tony Evers.

Although the $7.3 billion invested in Wisconsin’s new data centers is a substantial number, Microsoft is spending even more to build data centers in other locations around the world. Just this week, Smith revealed that the company has set aside $15.5 billion to spend on data center infrastructure in the U.K., and it has various other projects going in various parts of the world.

Microsoft is also spending money to rent data center capacity from other operators. Last week, the company said it has committed to spending $19.4 billion on renting AI capacity from Amsterdam-based Nebius Group N.V.’s data centers, which are located throughout Europe.

Photos: Microsoft