The Data Center Rush: Big Tech Arrives in the Dairyland

AI’s rapid growth is driving a surge in massive data centers, boosting innovation but raising environmental concerns. Expanding energy and water demands strain local resources, while Big Tech’s dominance concentrates power. As AI infrastructure scales, questions about sustainability, accountability, and equitable access are becoming increasingly urgent for communities and policymakers.

Believe it or not, a real person did not write what you just read. It was written by the artificial intelligence chatbot, ChatGPT.

Memphis, Phoenix, and Dallas are just a few hotspots across the country where AI data centers are fuelling the artificial intelligence explosion. ChatGPT, Sora AI, Grok, Copilot, Gemini – AI is everywhere.

And now the data center rush is coming to Wisconsin, drawn by fresh water and cheap, abundant land.

The Wisconsin Battleground

There are 47 data centers across Wisconsin. Most are used by internet service providers or as spaces for businesses to rent and use to track customer and company data. Since the age of the internet, data centers have been a key piece of infrastructure, akin to streetlights or storm drains.

AI data centers, on the other hand, can hardly be compared. For one, they use much more power and water. Additionally, while a simple co-location data center may take up a floor in an office building, an AI center may cover hundreds of acres.

For AI projects, tech corporations are eyeing up Kenosha, Port Washington, Caledonia, Mount Pleasant, and Menomonie, Wisconsin, just to name a few.

To better understand the AI data center controversy, a team of six Media Milwaukee student journalists attended public meetings, pored over public records and documents, and interviewed experts and stakeholders. During our roughly three months of reporting, we were drawn to a few locales across the state.

abandoned house evening — For companies like Vantage, buying out farmland and rural homes is relatively cheap. Photo credit: Alex Stahl

In Caledonia, Microsoft relented amid fierce community opposition. In Menomonie, Mayor Randy Knaack put the dampener on another data center project after his city responded similarly.

Community pushback hasn’t always been so successful.

In Port Washington, less than an hour north of Milwaukee, residents and activists are pressuring the City Council to walk back its contract with a company that is poised to build a 1900-acre data center campus. Recently, the center’s builder announced it would house OpenAI and Oracle.

Kenosha, meanwhile, faces a similar dilemma. Like Port Washington, Kenosha announced plans for an AI data center all the way back in January. And although residents didn’t take action until months later, the opposition at public meetings has transcended traditional political lines.

“I have never seen people so unified against something,” said Andy Manske, a 26-year-old candidate for governor. “I saw socialists there. I saw Republicans there. I saw Democrats there. I saw Independents there.”

So, why do these communities oppose data centers, and why do some cities continue to pursue them?

Costs and Benefits

One of the most prominent flashpoints has been the extent of these projects’ energy usage. Their very high projected power consumption has raised concerns about increased energy rates for residents.

Related to power consumption, opponents have also been concerned with the proposed high-voltage power line routes. In Ozaukee and Washington County, especially, residents are concerned about how they will disrupt farmland and natural regions.

On the other hand, proponents of the projects in their respective communities cite the long-term economic benefits. Job creation and a new stream of tax revenue are often the highlights.

In Port Washington, Vantage Data Centers said the project will create thousands of jobs during and post-construction, revitalizing the local economy.

“We’ve built sites across the country,” said Kaitlin Monaghan, a Vantage representative. “Data centers that create good jobs and better connect communities to the technology of the future.”

To accommodate the company’s $8 billion investment, the city established a tax incremental district. A TID redirects public funds towards development in and around the data center campus. The ideal outcome is that a TID will attract new business, reimburse the city’s investment, and generate a new source of tax money.

But those against the projects have also been staunchly opposed to a TID. Scott Lone, an advocate in Port Washington, said it is “corporate welfare dressed up as progress.”

Water usage is also a big point of contention.

The nonprofit Midwest Environmental Advocates is suing the City of Racine after the city failed to deliver a document describing the estimated water usage at Microsoft’s data center in Mount Pleasant.

Two days after the MEA’s lawsuit, the city released a document detailing how the data center would use 8.4 million gallons of water annually. That came after a seven-month open records request delay, which the City of Racine said was to ensure it did not violate any agreements with Microsoft.

In Port Washington, meanwhile, the center will consume roughly as much water as 66 homes. To meet the city’s environmental guidelines, Vantage plans to use a “closed-loop” system, wherein coolant is recycled and reused.

AI, the Future and Further Reading

The robot you heard from at the top of this column was not wrong: AI use is surging. Google searches aren’t the only place where it is, either. Academia has also sensed the growing need to prepare students for this future. UW-Milwaukee and MSOE are both developing new institutes to research computing and the future of AI.

“It’s clear that AI, specifically generative AI, but AI more broadly, has been demonstrated to be useful,” said Derek Riley, the computer science program director at the Milwaukee School of Engineering. “It will continue to find its way into our lives in many different ways.”