Wisconsin leaders have been working for several decades to strengthen and diversify its economy away from its dependence on agriculture and manufacturing, and suddenly, shockingly, it is riding a new wave of game-changing innovation. The boom in cloud computing and artificial intelligence has delivered three multi-billion dollar projects to southeast Wisconsin.
They are three proposed data centers that will serve as the guts for a rapid expansion into those two cutting-edge sectors of information technology. Some experts are seeing artificial intelligence as sparking the fourth industrial revolution.
Microsoft, one of the most valuable companies in the world, is already building a $3 billion complex of data center buildings in Pleasant Prairie in Racine County. And it just doubled down on Wisconsin as a hub for its AI advancement by acquiring 240 acres for another complex in Kenosha County.
On top of those two massive projects is a similar pending complex north of Port Washington in Ozaukee County. The identity of the data company that will build there is not known and it is not a done deal.
For proportion sake, the Kenosha site is about 40% of a square mile; the Racine County site is about two square miles; and the Ozaukee County site that has been assembled is almost three square miles.
Interestingly, Dane County has been growing the fastest in Wisconsin in the last couple decades, riding on the strength of technology companies like Epic Systems and Exact Sciences. Now it looks like southeast Wisconsin is catching favorable winds for explosive growth, thanks to AI.
It isn’t just the hundreds of construction jobs that will last for more than five years, nor the 100 to 200 IT employees who will run the centers. It is also what AI will do for manufacturing; Wisconsin is the second most manufacturing-intensive state with about 17% of its jobs in that sector. Some of the most certain and most immediate gains from artificial intelligence will happen in manufacturing.
Microsoft has created the Connected Systems Institute (CSI) in partnership with the University of Wisconsin-Milwaukee and Rockwell Automation for propelling AI applications in manufacturing. Wisconsin could not have better partners for the AI revolution. Microsoft’s top two executives have Wisconsin roots.
Local leaders are not worried so much about noise from the data centers (about the same decibel level of noise as freeways) or water usage (new cooling systems are not heavily water-dependent). Each billion-dollar data building will look something like a warehouse. Port Washington Mayor Ted Neitzke sees them surrounded by “a forest.” Berms and buffer space are other noise and aesthetic solutions.
That said, there is one monumental requirement that demands a grand bargain. It’s about immense power needs. The Port Washington complex, as a point in case, will need an estimated gigawatt of power, enough to serve 750,000 homes. For perspective, there are about 700,000 homes in the four-county Milwaukee metro area.
The data and energy companies are already working together to supply the necessary energy, but have not yet revealed how the additional energy capacity will be created.
Here’s where a grand bargain could be struck, to account for the realities of climate change. The country just went through the warmest year on record in 2024, topping 2023, the previous record-setter. Only the extremist right wing of the Republican Party has its head in the sand about the need to reduce carbon emissions, the main driver of the record temperatures.
Before the people of Wisconsin and local leaders green light all the data center expansions, they need to require a deal with the data and energy powerhouses to provide the power with alternative sources of energy.
Solar energy has become much cheaper, and wind turbines are an increasing source, but they would need extra capacity to juice batteries when the sun and wind are absent. That extra alternative energy, instead of coal-fired plants, should be possible in the eyes of Greg Nemet of the LaFollette Institute of Public Affairs at the University of Wisconsin – Madison.
Nemet, who has become a leading energy and climate expert in the world with his research on the increasingly competitive costs of alternate sources, said rcently, “Fueling this demand for electricity can be done well, or it can be done badly. It can be done with natural gas, which is going to create a lot of problems later, or can be done with clean energy, which can avoid those problems.”
Wisconsin has a golden opportunity to win a trifecta prize: economic growth and some new jobs, more property tax revenues for local governments, and a cleaner environment.
Let’s make a wise long-term bargain.
