Microsoft's $13 Billion Wisconsin Gamble: 15 New Data Centers on the Former Foxconn Site

Jan 21, 2026 Written By Blake Crosley

Microsoft submitted plans for 15 additional data centers in Mount Pleasant, Wisconsin, representing a $13 billion investment that would transform the failed Foxconn manufacturing site into one of the largest AI infrastructure hubs in the United States.¹ The proposal comes just two months after residents in neighboring Caledonia forced Microsoft to withdraw a separate data center project, highlighting the tension between hyperscaler expansion ambitions and community concerns over electricity rates, water consumption, and industrial development.²

TL;DR

Microsoft proposes two new campuses totaling 15 data centers across nearly 9 million square feet on land purchased from the abandoned Foxconn development. Combined with two facilities already under construction, the expansion would bring Microsoft's total Wisconsin investment to over $20 billion and require approximately 900 megawatts of electricity—enough to power nearly one million homes.³ The village planning commission has recommended conditional approval, but the project faces significant headwinds from bipartisan state legislation aimed at preventing data center costs from raising residential utility bills. Wisconsin is becoming a test case for whether hyperscalers can scale AI infrastructure in the Midwest while maintaining community support.

From Foxconn's "Eighth Wonder" to Microsoft's AI Hub

The Mount Pleasant site carries symbolic weight that extends far beyond its acreage. In 2017, President Trump stood alongside Foxconn executives to announce what he called the "eighth wonder of the world"—a $10 billion display panel manufacturing plant that would employ 13,000 workers.⁴ Wisconsin's Republican Governor Scott Walker secured the deal with $3 billion in state subsidies, the largest incentive package ever offered to a foreign company.

Foxconn initially promised 30,000 jobs. That figure dropped to 13,000, then to 1,500, before ultimately delivering just 281 positions.⁵ The pandemic accelerated the project's collapse, and by 2020, Foxconn had scaled back operations to a small research facility on a fraction of the prepared land.

Microsoft began acquiring the abandoned parcels in 2023, paying $225.8 million for 1,363 acres—including $76 million to the last family that had held out against selling their 407-acre farm for Foxconn.⁶ The village board approved data center development in April 2023, with some of Microsoft's $50 million land payment going to reimburse Foxconn for releasing its rights to 315 acres.⁷

Timeline of the site transformation:

The $13 Billion Expansion Proposal

Documents filed with Mount Pleasant's planning commission reveal the scope of Microsoft's ambitions. The expansion would create two distinct campuses with a combined footprint approaching 9 million square feet.⁸

Campus One (Durand Avenue):

• Nine data center buildings
• Taxable value exceeding $7.7 billion
• Expected to generate $45 million annually in village revenues once debts paid

Campus Two (International Drive):

• Six data center buildings
• 74,000 square feet of office space
• Over 3.5 million square feet across 530 acres
• Taxable value exceeding $5.3 billion
• Expected to generate $30 million annually in village revenues⁹

Both developments would occur within tax increment financing districts, meaning the village would use future property tax revenue from Microsoft to pay off infrastructure investments. This financing structure creates both opportunity and risk—if Microsoft's development timeline slips or facility valuations fall short of projections, the village bears the shortfall.

The planning commission recommended approval in January 2026, subject to multiple conditions that have not been publicly disclosed.¹⁰ Final approval requires village board action.

The Caledonia Rejection and "Community First" Pivot

Microsoft's Wisconsin expansion has not proceeded without friction. In October 2025, the company withdrew a rezoning request in neighboring Caledonia after residents mobilized against a proposed data center across from the WE Energies power plant.¹¹

Caledonia trustee Fran Martin captured the community's response: "We did seem to have awoken a sleeping giant."¹²

The rejection followed similar patterns emerging nationwide. Residents cited concerns about industrial noise, property values, water table impacts, and especially electricity costs. Data centers consume massive amounts of power continuously, and communities fear that utility infrastructure upgrades to serve these facilities will be passed on to residential ratepayers.

Microsoft's response came in January 2026 with a "Community-First AI Infrastructure" initiative authored by Vice Chair and President Brad Smith.¹³ The playbook commits Microsoft to:

• Electricity pricing protections: Supporting rate structures that prevent data center costs from raising residential bills
• Full tax payments: Paying property taxes without seeking abatements that shift burdens to other taxpayers
• Water stewardship: Using closed-loop cooling systems and investing in watershed restoration
• Workforce development: Training programs for local workers
• Community investment: Direct funding for local priorities

The initiative represents a strategic pivot. Microsoft recognized that brute-force expansion—acquiring land and filing permits without community engagement—had reached its limits. The Caledonia defeat demonstrated that even a trillion-dollar company cannot simply impose infrastructure on unwilling communities.

Energy Requirements and Grid Stress

The 15 proposed data centers, combined with existing facilities, would require approximately 900 megawatts of electricity.¹⁴ For context:

• 900 MW could power roughly 900,000 Wisconsin homes
• Microsoft and Vantage Data Centers' combined Wisconsin projects would require 3.9 GW—enough for 4.3 million homes¹⁵
• WE Energies plans to spend $19.3 billion on electric generation over the next five years, nearly $10 billion more than its previous plan, largely driven by data center proposals¹⁶

The electricity demand creates a chicken-and-egg problem. Utilities must build generation and transmission capacity before data centers can operate, but those investments become stranded assets if data center projects stall or relocate. WE Energies has proposed a differential rate structure placing infrastructure costs directly on large electricity users rather than spreading them across all ratepayers.¹⁷

Microsoft publicly supports this approach. In its Community-First playbook, the company commits to "pay its own way" for electrical infrastructure rather than expecting residential customers to subsidize AI development.¹⁸

The energy challenge extends beyond cost allocation. Wisconsin's grid must accommodate nearly 5 GW of new data center load while also meeting decarbonization goals. Microsoft has partnered with National Grid Renewables to build a 250 MW solar project in Wisconsin, expected to begin operating in 2027.¹⁹ However, solar's intermittent generation cannot directly power 24/7 data center operations, requiring either battery storage, grid backup, or both.

Water Consumption and Environmental Concerns

Data center cooling requires substantial water resources, particularly in facilities using evaporative cooling systems. Microsoft's Mount Pleasant operations draw water from Lake Michigan through the City of Racine's municipal supply.

Projected water usage:

Microsoft emphasizes that 8.4 million gallons annually represents a fraction of what Foxconn originally planned—the failed manufacturing plant had approval for 7 million gallons per day.²⁰ Still, environmental advocates have pushed for transparency.

Midwest Environmental Advocates, representing Milwaukee Riverkeepers, sued Racine for failing to release water usage documents, forcing disclosure of the consumption projections.²¹ The lawsuit highlighted concerns that public infrastructure serving private data centers should face public scrutiny.

Microsoft has committed to "water positive" operations by 2030, meaning the company would replenish more water than it consumes through watershed restoration and conservation investments. The Wisconsin projects include investments in southeastern Wisconsin watershed programs, though specific commitments have not been quantified publicly.²²

The Bipartisan Regulatory Showdown

Wisconsin's data center boom has triggered an unusual legislative response: bipartisan agreement that regulation is needed, combined with fundamental disagreement about what that regulation should look like.

Republican approach (AB840):

• Passed the Assembly 53-44 in January 2026
• Requires the Public Service Commission to ensure data center costs do not raise residential utility bills
• Does not mandate renewable energy requirements
• Governor Evers has indicated he is unlikely to sign²³

Democratic approach:

• Introduced in November 2025
• Includes renewable energy mandates for data centers
• Stronger environmental review requirements
• Supported by environmental groups but opposed by utilities

The fundamental dispute concerns clean energy. Democrats want data centers to accelerate Wisconsin's renewable energy transition by requiring hyperscalers to source power from new wind and solar projects. Republicans argue such mandates would drive data centers to other states, forfeiting economic benefits without reducing global emissions.²⁴

The Public Service Commission has cast doubt on its ability to protect customers from data center rate impacts regardless of which bill passes. Commission staff noted that utility rates are based on future estimates, making it difficult to isolate data center costs from broader infrastructure investments.²⁵

Governor Evers' spokesperson signaled the current Republican bill lacks sufficient stakeholder support for signature. The legislative impasse may continue through 2026, creating uncertainty for projects awaiting regulatory clarity.

Infrastructure Deployment Implications

The Wisconsin situation offers lessons for data center deployment nationwide.

Site selection considerations:

• Former industrial sites like Foxconn offer pre-permitted land with existing infrastructure access, but may carry community skepticism from prior failed projects
• Tax increment financing can fund infrastructure but creates long-term municipal risk if projects underperform
• Community opposition can derail projects regardless of economic benefits, as demonstrated in Caledonia
• Regulatory uncertainty at the state level adds timeline risk even for approved projects

Power strategy requirements:

• Differential rate structures may become standard as utilities seek to prevent residential ratepayer backlash
• On-site generation and storage reduce grid dependency but increase capital costs
• Renewable PPAs alone cannot provide 24/7 baseload power without storage or grid backup

Community engagement models:

Microsoft's Community-First initiative represents one response to mounting opposition. Key elements that may become industry standards:

• Early disclosure of electricity and water requirements
• Binding commitments on rate impact prevention
• Local workforce development with measurable targets
• Watershed and environmental restoration investments

Organizations planning large-scale AI infrastructure should anticipate that the permitting environment has shifted. The era of quiet land acquisition followed by permit applications has ended. Communities now organize opposition before hyperscalers file their first documents.

The Introl Perspective

Deploying AI infrastructure at the scale Microsoft envisions in Wisconsin requires coordination across multiple technical disciplines. The 15-facility expansion involves:

• High-density power distribution for GPU clusters
• Liquid cooling systems increasingly required for AI accelerators
• Network fabric connecting facilities across separated campuses
• Construction management coordinating billions in simultaneous development

Field engineering teams supporting such deployments must navigate both technical complexity and community dynamics. A successful Wisconsin buildout depends not just on racking servers but on maintaining the social license to operate that Microsoft nearly lost in Caledonia.

What Happens Next

Microsoft's Mount Pleasant expansion awaits final village board approval following the planning commission's conditional recommendation. Key milestones to watch:

Q1 2026:

• Village board vote on Campus One and Campus Two
• First data center (Fairwater) reaches operational status
• Wisconsin legislature continues debate on data center regulation

2026-2027:

• Construction begins on approved facilities
• 250 MW solar project development continues
• WE Energies rate structure proceedings at Public Service Commission

2027-2028:

• Second data center reaches operational status
• Solar generation begins supporting Microsoft load
• Additional facilities from 15-building expansion come online

The project's success or failure will influence hyperscaler expansion strategies across the Midwest. Wisconsin offers abundant land, Great Lakes water access, and relatively affordable electricity—but only if communities accept the trade-offs that AI infrastructure development requires.

Microsoft has bet $20 billion that it can navigate those trade-offs better than Foxconn navigated theirs. The workers who never got Foxconn jobs and the families who sold farms for a factory that never came are watching to see if this time is different.

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