Microsoft plans to invest $4 billion in building a second AI data center in Wisconsin

Microsoft plans to allocate $4 billion to establish a second artificial intelligence data center in Wisconsin. The company’s total investment in the state has surpassed $7 billion as it races to build capacity to meet the needs of companies that want to run AI models.

The first data center, in nearby Mount Pleasant, cost around $3.3 billion, with expectations to come online in early 2026. Microsoft’s president and vice chair, Brad Smith, said the first Wisconsin data center will house hundreds of thousands of Nvidia Blackwell GB200 graphics processing units that can handle AI models.

Microsoft wants to prevent driving up energy prices in Wisconsin

Smith revealed that the second data center will be similar in scale to the first and will come online in 2027 or after that. He added that the company has put a lot of effort into finding what it would build for phase two and how it would build the infrastructure.

Microsoft said it will introduce power-efficient alternatives, such as pre-paying for electrical infrastructure, to avoid raising electricity rates in the region. The company also plans to include a state-of-the-art cooling system aimed at tapping into Wisconsin’s cool climate and reducing the data center’s yearly water use to that of an average restaurant. 

Smith, who spent part of his childhood in Mount Pleasant, said the tech firm will match the amount of energy it consumes from fossil fuel sources with carbon-free energy it will contribute to the grid. He assured residents in the region that Microsoft was doing everything it could to manage the power issue and would ensure they didn’t have to pay more for electricity because of its presence.

The company’s president added that a solar farm under construction 150 miles northwest of the data centers will contribute 2250 megawatts of power. He also acknowledged that both data centers might require 900 megawatts for operation.

The site in Racine County for the second data center was initially the site of a proposed $10 billion manufacturing plant by Foxconn, but those plans were drastically scaled back. Smith disclosed that the second data center will use as much as 2.8 million gallons of water per year, compared to Foxconn’s permitted consumption of over 7 million per day.

Microsoft’s CEO, Satya Nadella, stated that the company added over 2 gigawatts of new capacity last year, but said the second infrastructure will be the world’s most powerful data center. They said the data center will deliver 10x the performance of the world’s fastest supercomputer, which will enable AI training and faster inference workloads.

Microsoft plans new AI investment in UK

Nadella revealed that Microsoft’s new infrastructure is just one of several similar sites the company is establishing across more than 70 regions. He said the firm has also deployed over 100 data centers around the world that power AI model training, test-time compute, RL tuning, and real-time inference.

The tech company also promised to employ around 500 full-time employees once the first data center is fully operational. The firm hopes the number of staff will grow to around 800 once the second data center is complete.

On Tuesday, the tech giant said it would invest $30 billion in the UK by 2028 to establish its artificial intelligence infrastructure in the region. The plans also include an additional $15.5 billion in capital expansion and $15.1 billion in its UK operations. The company hopes the investment will enable it to build a supercomputer with more than 23,000 advanced graphics processing units (GPUs). GPU manufacturer Nvidia revealed it plans to deploy 120,000 Blackwell chips in the UK. build a new data center in Waltham Cross, north of central London.

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