TLDR
- Microsoft announces $4 billion investment for second Wisconsin data center, adding to $3.3 billion first facility opening early 2026
- First data center will house hundreds of thousands of Nvidia Blackwell GB200 GPUs for AI workloads
- Combined facilities may require over 900 megawatts of power, with Microsoft committing to match fossil fuel consumption with carbon-free energy
- Truist Securities maintains Buy rating with $675 price target following Microsoft’s updated OpenAI partnership agreement
- Wisconsin data centers will deliver 10x performance of world’s fastest supercomputer according to CEO Satya Nadella
Microsoft announced Thursday it will spend $4 billion to build a second data center in Wisconsin. This comes on top of the $3.3 billion already allocated for the first facility.
The first Wisconsin data center in Mount Pleasant is scheduled to open in early 2026. It will house hundreds of thousands of Nvidia Blackwell GB200 graphics processing units designed for artificial intelligence workloads.
Brad Smith, Microsoft’s president and vice chair, revealed these details at a town hall meeting. Smith spent part of his childhood in Mount Pleasant, adding a personal connection to the project.
The facility is being built on land originally planned for a Foxconn manufacturing plant. This repurposing gives new life to the previously stalled development.
Cloud infrastructure providers are scrambling to build capacity for AI model demands. More than 700 million people use OpenAI’s ChatGPT, which runs on Microsoft’s Azure cloud platform.
Software companies from Adobe to Salesforce are adding AI features to attract customers. This creates enormous demand for processing power and data center capacity.
Power and Environmental Considerations
The two Wisconsin data centers combined may require more than 900 megawatts of power. A solar farm under construction 150 miles northwest will contribute 250 megawatts.
Microsoft plans to match its fossil fuel energy consumption with carbon-free energy contributions to the grid. Smith emphasized the company’s commitment to managing electricity costs for local residents.
The first data center will use up to 2.8 million gallons of water annually. This is considerably less than Foxconn’s permitted consumption of over 7 million gallons per day.
CEO Satya Nadella wrote on X that the facility “will deliver 10x the performance of the world’s fastest supercomputer today.” This enables AI training and inference workloads at unprecedented levels.
Wisconsin’s Democratic governor Tony Evers said the state will host the largest number of GPUs under one roof. This positions Wisconsin as a major player in the AI infrastructure race.
Second Phase and Market Response
The second data center will operate at similar scale to the first facility. It’s expected to enter operation in 2027 or later, according to Smith.
Microsoft paused to carefully plan the second phase construction approach. The company wants to optimize the design and implementation strategy.
Truist Securities maintains its Buy rating on Microsoft stock with a $675 price target. This follows the company’s updated partnership agreement with OpenAI.
The research firm noted the brief joint statement between Microsoft and OpenAI could bring market stability. Investors had concerns about the nature of their existing relationship.
Analysts expect more partnership details to emerge in coming weeks. They’re monitoring how revenue opportunities might evolve from the redefined collaboration.
Microsoft has been expanding data center investments globally this year. Earlier this week, Smith announced $15.5 billion in additional UK infrastructure spending through 2028.
Amsterdam’s Nebius Group separately announced Microsoft agreed to spend up to $19.4 billion over five years. This covers AI data center capacity rental agreements.
The Wisconsin announcement represents Microsoft’s largest single-state data center investment to date. The company continues building infrastructure to support growing AI demand from enterprise customers.
