Data centers have been around since the inception of computers. Today, they serve to connect people and businesses to search engines, social media, content streaming, cloud storage and more.
Everyone who uses a smartphone or a computer depends on data centers. Actions we take every day, like sending emails or uploading photos, rely on a data center to perform them. “If you hear that something is in the cloud, actually it’s very much on the ground and in one of these data centers,” says Kyle Cranmer, director of the Data Science Institute at UW-Madison.
Costa Samaras, director of the Wilton E. Scott Institute for Energy Innovation at Carnegie Mellon University, puts it this way: “Data centers are the foundation of the internet. “They are essential infrastructure like railroads or power plants or highways.”
Tech companies like Microsoft, Meta and Vantage are investing billions of dollars in artificial intelligence. That’s led to the rapid growth of hyperscale data centers. Those are large, often nondescript facilities that house thousands of industrial-scale computer servers to support cloud and AI infrastructure. Hyperscale data centers are controversial, in large part, because they require more land and extensive resources to operate.
The largest tech companies in the world are investing billions of dollars in data centers. There were 4,149 data centers up and running in the U.S. according to a winter 2025 report by the tech advocacy coalition American Edge Project. In addition, more than 2,700 data centers were newly announced or under construction in the U.S. Forty-seven data centers were running in Wisconsin, with another 43 planned or in production.
There’s been a huge boom in data center growth since the start of 2025, when Stargate announced its data center expansion to support AI-related infrastructure. A $15 billion Port Washington, WI data center project called Lighthouse is part of OpenAI’s Stargate expansion. Lighthouse will be comprised of four data centers built on 500 of 672 acres of land acquired by Vantage, which is the Colorado company developing the project. Construction is underway on more than $7 billion in Microsoft projects in Racine County. Microsoft is planning to expand its Mount Pleasant campus, close to the land cleared for the Foxconn project, with an additional 15 data centers that would equal the size of about 40 Walmart Supercenters, according to a Milwaukee Journal Sentinel report.
Vocal opposition to the Port Washington Lighthouse project — and to a proposed site that Microsoft considered in Caledonia — has kept the subject in the news in Wisconsin. Similar stories are popping up around the nation. And many people around the country are concerned about the data center boom, according to the Marquette Law School national survey released in February 2026. It says 62% of those surveyed believe the costs of data centers outweigh the benefits.
Tech companies like Microsoft, Meta, Vantage and Oracle have invested billions of dollars in artificial intelligence. They say hyperscale data centers provide the infrastructure needed to improve AI performance and growth.
Some proponents of data centers make lofty promises about the importance of AI – and the related growth in data centers – to the nation’s future.
In the forward to the publication America’s AI Surge: Powering Investment, Jobs, and Growth in Every State, American Edge Project CEO Doug Kelly says, “Artificial intelligence (AI) is catalyzing America’s fastest, broadest infrastructure build-out in peacetime history.” Kelly adds: “AI is often described as America’s modern-day moonshot – our chance to rally the nation around a shared mission to accelerate innovation. But the truth is larger: America has a moral and civic obligation to unlock AI’s potential so it lifts humanity, expands freedom, and accelerates human development worldwide. That has always been our promise.”
Some local lawmakers in Wisconsin who are eager for development in their communities say data centers can generate millions of dollars in tax revenue. Port Washington Mayor Ted Neitzke made that argument at a city planning commission meeting in October 2025 when arguing for the Lighthouse development. Neitzke said the data center project in Port Washington will bolster the city’s budget. In an interview with WUWM, Neitzke added: “People will ask me what keeps me up at night. It’s not the data center. It’s what if we don’t have development? What happens to the high school I graduated from? What happens to the quality of our roads? And we’ve been keeping it together on a shoestring,” Neitzke said.
Some advocates of job creation argue that data centers will provide important job opportunities and job training. OpenAI, Oracle and Vantage Data Centers say the Port Washington Lighthouse data centers project, which is part of OpenAI’s Stargate expansion, will create more than 4,000 skilled construction jobs, most of which will be union jobs. Construction is expected to be completed in 2028. The tech companies say the job creation will have a positive impact long after construction ends. “Once complete, Vantage and Oracle will create more than 1,000 long-term jobs and thousands more indirect jobs,” according to an October 2025 release from the companies.
In December 2025, Vantage, which is behind the Port Washington Lighthouse data center development, announced its partnership with local organizations like WRTP | BIG STEP and United Way to provide workforce opportunities and to increase broadband availability. Jonathan Abraham, a carpenter and union member, told Port Washington city planning commission members in October 2025 that he’s among workers who welcome that city’s data centers project. “Some types of construction will never return. This offers a new path for skilled tradespeople who are just trying to enter the workforce and for journeymen like myself to finish off our careers,” Abraham said.
Microsoft is promising its Mount Pleasant data centers project will employ hundreds of people when it’s finished. And Microsoft Vice President and Chair Brad Smith says his company has partnered with dozens of Wisconsin organizations and colleges to train more than 100,000 people in the AI Workforce. In a blog post in September 2025, Smith promised the Mount Pleasant data centers project will be “the most advanced AI datacenter in the world.” He said “this is where the next generation of AI will be trained, setting the stage for breakthroughs that will shape the future. New discoveries in medicine, science, and other critical fields will start right here, with the models we train in Wisconsin. But what does that mean for the average Wisconsinite? It means new jobs, new skills, and new opportunities — right here at home. 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.”
Take a virtual tour of a Microsoft Data Center
Arguments against data centers fall into several camps. Many critics share the overarching concern that development is moving too quickly and without enough oversight or public involvement.
A recent Wisconsin Watch report revealed that at least four Wisconsin communities signed nondisclosure agreements with tech companies for major data center proposals. Amy Barrilleaux, communications director at Clean Wisconsin, says those deals have caused a lack of transparency. “It's hard to overstate the concern that's out there on so many levels,” Barrilleaux says. “I think certainly having things rush through behind closed doors only makes that worse.”
Impact on climate goals, homeowners’ and renters’ energy rates, quality of life
Some people opposed to the rapid growth of data centers point to data centers’ energy usage and how it affects the environment. According to a University of Michigan study, “the rapidly growing energy demands of data centers have forced states to delay the retirement of coal and gas plants and even consider building new fossil fuel facilities.” The study’s authors say the high energy usage “can strain local infrastructure and undermine climate goals.”
Critics of the data center boom also worry about how residential power rates could be affected by data centers’ power demands. The Lighthouse project in Port Washington calls for new high power transmission lines to connect the data center complex to the power supply. Those high power transmission lines could cover 100 miles and span six counties, at a projected cost of up to $1.6 billion. Some people argue the project will add costs to their electric bills, despite promises by WEC Energy Group President and CEO Scott Lauber. Critics argue that the building of the transmission lines -- and the data centers themselves -- will destroy the rural character of the area. Vantage, which is developing the Lighthouse project, is planning four data centers on 500 of 672 acres that Vantage has acquired. Some farmers and homeowners have already vacated the property.
A top concern among critics is how hyperscale data centers impact water. The Lincoln Institute of Land Policy describes data centers as resource-ravenous, pointing out that “even a mid-sized data center consumes as much water as a small town, while larger ones require up to 5 million gallons of water every day — as much as a city of 50,000 people.” Most hyperscale data centers continually pull vast amounts of water from local supplies, using it to cool their equipment. While the data centers return that water, they run the risk of stressing water systems, as well as water supplies and wells, especially in drought-prone areas. (Closed-loop cooling systems are an exception.) Another concern is the vast amount of energy required to power and cool data centers. And that impacts water, because it takes a lot of water to generate energy from fossil fuels.
The Lincoln Institute of Land Policy says, “about half of the electricity currently used by U.S. data centers comes from fossil fuel power plants, which themselves use a lot of water, as they heat up steam to turn their massive turbines.” In addition, some cooling methods leave behind salt and other contaminants. Critics say the cumulative demand could impact the water quantity and quality of rivers, lakes and community water supplies.
Yet environmentalists and other observers point out that it’s hard to get information to gauge the impact of data centers on water use and water supplies.
Melissa Scanlan directs the Center for Water Policy at UWM's School of Freshwater Sciences. She quotes a report that the Lawrence Berkeley National Lab prepared on the water usage of data centers. “They looked at data from 2023 and showed that data centers across the country had consumed 17 billion gallons of water,” Scanlan says.
Although the Great Lakes Compact sets standards for water use and management throughout the Great Lakes basin, Scanlan says the compact doesn’t apply to data centers because they tap into existing municipal water systems, rather than drawing their water directly from a Great Lake. Microsoft’s Mount Pleasant center will use city of Racine water. The Lighthouse project being built by Vantage in Port Washington will hook up to that city’s water system. Scanlan says, “there isn’t one centralized place to look for the regional impact of this because it’s lumped in with all of the municipal ways that water is being used by a city.”
Microsoft counters some of the criticism by saying its Mount Pleasant plant will “dramatically cut” water usage with a closed-loop system that continually recycles a fixed volume of water.
But Amy Barrilleaux says that doesn’t answer all of the critics’ questions.
“Those closed-loop water systems -- real information on those is often protected as proprietary by the data center developers and the tech companies,” says Barrilleaux. “It's very difficult to get real clarity on those systems, but we do know that they're chemical systems. The closed-loop technology uses chemicals. It is our understanding that they use PFAS, which are also known as ‘forever chemicals.’ So, there's a lot of concern about what happens when those chemicals are disposed of. How are they disposed of? What happens if there's a leak? I don't think we've found any real answers to those things.”
The authors of a University of Michigan study that says data centers “can strain local infrastructure and undermine climate goals,” say another problem with data centers is that the promised jobs might not come to fruition. “Despite claims of job creation, data centers typically generate few permanent positions relative to the scale of public subsidy they receive,” the study reads. The authors suggest that the potentially negative impacts of data centers outweigh the positives.
Some critics of the rapid spread of artificial intelligence oppose the rapid growth of data centers, since the facilities are key to AI’s expansion. They say AI could eliminate jobs and have negative impacts on arts and culture. “The issue is what does the future with data centers and artificial intelligence look like in the United States? Is it one that is good for communities or is it one that communities take a backseat to?” asks Costa Samaras, director of the Wilton E. Scott Institute for Energy Innovation at Carnegie Mellon University.
Kyle Cranmer, director of the Data Science Institute at UW-Madison, says data centers are at the intersection of many things that people are both excited and worried about. “Data centers use a lot of energy and water, so it does feel in opposition to many of the environmental or climate goals that many people have been pushing for for the last decade,” Cranmer says. “Then there’s the economy. Data centers on one hand represent economic growth and jobs, but people are also worried about their electric bills going up and the affordability crisis. When you connect it back to AI, there’s excitement about the potential gains in efficiency, but people are also worried about a changing workforce and that AI might take jobs away.”
Expert opinions vary on whether Wisconsin is currently a hotbed for data centers. Wisconsin is a desirable destination for tech companies, due to the state’s data center sales and use tax exemption and water access for cooling servers,” says Amy Barrilleaux, communications director at Clean Wisconsin.
According to WEDC (the Wisconsin Economic Development Corporation), the Data Center Sales and Use Tax Exemption program was put into place in hopes of luring more data centers, because “data centers are a rapidly growing industry across the U.S., and Wisconsin has fewer data centers as a percentage of total businesses than other states.” WEDC adds that the program “aims to attract more data centers to Wisconsin, along with the highly educated workforce, high wages, and significant capital investment these projects bring to communities.”
Wisconsin had 47 data centers as of October 2025, according to American Edge Project. In comparison, the state’s neighbor, Illinois, had 232. Virginia led the U.S. with 663 data centers.
“It almost seems like every state is a hotbed for data centers,” says Barrilleaux. “Certainly, this is not a thing that is unique to Wisconsin. But I will say that since Wisconsin passed tax incentives for tech companies, that’s when you started to see data centers really start coming in and getting proposed.”
Elected officials, businesses and community-led groups play a role in approving, regulating and overseeing data center development and also in speaking out against the centers.
Following the rising number of data center proposals in 2025, and the rising outcry among critics, Wisconsin legislators released several proposals.
A Republican measure appears to be on the fast track. On January 9, 2026, GOP Assembly members introduced AB840. Before the end of the month, lawmakers had held a public hearing and the Assembly approved the measure, sending it to the Senate.
The bill would require the Public Service Commission to ensure that no other customers are responsible for the cost of constructing or extending electric infrastructure that primarily serves a data center. The measure also would require that water used to cool equipment be contained in a closed-loop system, with a fixed volume of water that’s continually recycled. Renewable energy facilities that primarily serve the data center would be required to be located at the site of the data center. Republicans say that’s meant to minimize the strain on the statewide grid and to lower costs.
Also in January 2026, a bill meant to prevent secrecy in deals that tech companies and data center developers make with communities was announced and is expected to be introduced soon. State Sen. Andre Jacque (R-New Franken) is a co-author. The measure would prevent data center developers “from entering into any agreement, including a nondisclosure agreement, that has the purpose or effect of concealing the details of the development of the data center from the public or preventing public review of the data center.”
In December 2025, Democrats in the Senate introduced SB729, which would require large-scale data centers to derive at least 70% of their annual electric energy from renewable resources in order to qualify for exemptions from sales and use taxes. In addition, in order to receive tax credits, large-scale data centers would have to pay laborers and mechanics who construct or refurbish the facilities the prevailing wage or the wage under the collective bargaining agreement, whichever is higher. The Democratic proposal has been referred to the Senate Committee on Utilities, Technology and Tourism.
The subject of data centers has made it into the 2026 race for governor in Wisconsin.
On the national level, Microsoft, which is building an expansive data center complex in Mount Pleasant, WI, is trying to win over opponents of data centers. The Associated Press reported that Microsoft Vice President and Chair Brad Smith met with federal lawmakers on January 13, 2026 “to push forward an approach that calls for the industry, not taxpayers, to pay the full costs of the vast network of computing warehouses needed to power AI chatbots like ChatGPT, Google’s Gemini and Microsoft’s own Copilot.” Smith told the AP that “local communities naturally want to see new jobs but not at the expense of higher electricity prices or the diversion of their water.” The same day that Smith met with lawmakers, he used a blog post to spell out Microsoft’s Community-First AI Infrastructure initiative. It pledges that the company will “pay our way to ensure our data centers don’t increase your electricity prices.” The initiative also says Microsoft data centers will minimize water use and will “be a good neighbor in the communities where we build, own, and operate our data centers.”
President Donald Trump responded to Microsoft’s actions in a social media post. In part, it reads:
I never want Americans to pay higher Electricity bills because of Data Centers. Therefore, my Administration is working with major American Technology Companies to secure their commitment to the American People, and we will have much to announce in the coming weeks. First up is Microsoft, who my team has been working with, and which will make major changes beginning this week to ensure that Americans don’t “pick up the tab” for their POWER consumption, in the form of paying higher Utility bills.”
There also are Wisconsin groups that are promoting data center development, such as the Wisconsin Data Center Coalition (WIDCC), the Wisconsin Economic Development Corporation (WEDC) and the Wisconsin Regional Training Partnership | Building Industry Group Skilled Trades Employment Program (WRTP | BIG STEP).
Meanwhile, a number of environmental organizations and consumer advocates are keeping close tabs on data center projects and are urging people wiho have concerns to share them with elected officials. Many of the opponents released statements to that effect after state Republicans introduced AB840 in January. The critics said the measure wouldn’t go far enough in regulating data centers. In particular, they took issue with a provision that requires that renewable energy used for data centers be generated on-site.
Tom Content, executive director of Citizens Utility Board of Wisconsin, says the provision would be a step backward. “One of the cons in the bill is the renewable energy provision because solar is actually cheaper than other forms of generation," says Content. "It used to be ... a high-cost resource, and now it's the most affordable, and so a provision that stops solar development across the state is actually one that will drive up prices.”
RENEW Wisconsin says the mandate would “basically guarantee that data centers will be powered by natural gas.” And Clean Wisconsin’s Amy Barrilleaux says, “it's really important to understand that we're going to have data centers in Wisconsin.” She adds, "We've got these things already being built, and if we power them all by burning fossil fuels in our communities, that is incredibly harmful.”
Hyperscale data centers power artificial intelligence. Some critics are concerned about how quickly tech companies are building these projects and whether the growing AI bubble will pop. Amy Barrilleaux of Clean Wisconsin says concerns about today’s data centers becoming obsolete “are very real.”
“Look, in Janesville the data center wants to locate in the area where GM used to be,” Barrilleaux says, referring to the defunct 250-acre General Motors Assembly plant. “I think Janesville understands almost better than any community what it’s like to have something leave and the hole that’s left behind.”
Kyle Cranmer, director of the Data Science Institute at UW-Madison, says data centers likely won’t become obsolete, but they could evolve.
“If the data centers only served AI and you’re worried about an AI bubble, then I think the worry that data centers might be obsolete is much higher,” Cranmer says. “But data centers are very multi-purposed. They’re serving up all sorts of aspects of our digital lives.”
