Microsoft Backs Off New Data Center After Small Wisconsin Town Backlash

Despite Big Tech pouring billions into AI infrastructure projects, not everyone wants a massive data center in their backyard.

Microsoft has ditched plans for a data center in Caledonia, Wisconsin, after facing pushback from the local community.

The Milwaukee Journal Sentinel reported Wednesday that the tech giant canceled its application for the current site but is still seeking to develop a data center somewhere in Caledonia or the broader southeastern Wisconsin area.

Dubbed Project Nova, the complex was reportedly planned as a 244-acre facility containing three data center buildings and a 15-acre electrical substation near the We Energies Oak Creek Power Plant. It would have been Microsoft’s third planned data center in the state.

In a statement provided to Gizmodo, Microsoft said:

Based on the community feedback we heard, we have chosen not to move forward with this site; we remain committed to investing in Southeast Wisconsin and look forward to working with the Village of Caledonia and Racine County leaders to identify a site that aligns with community priorities and our long-term development goals.

The news comes as data center projects are popping up across the U.S. in an effort to build out the critical infrastructure for more powerful AI models and justify the staggering investments tech companies are sinking into a race for superintelligence.

OpenAI’s Stargate project includes plans for data centers in Texas, Ohio, and New Mexico. Meta is building new AI data centers in Ohio and Louisiana. And just this month, Google announced plans for a new data center in Arkansas.

Caledonia is one of the few towns that have been able to halt these pricey projects. In September, Google also withdrew a rezoning proposal for a 468-acre data center in Indianapolis.

Caledonia residents who opposed the plan launched a website called Stop Project Nova, where they listed concerns including higher electric bills, power grid instability, and light pollution.

Additionally, local station Fox 6 Milwaukee reported in September that more than 100 residents attended a public meeting to share concerns about the project’s environmental impact, including the use of water from Lake Michigan.

Still, Microsoft’s other data center plans in the region remain on track.

Last month, the company said it’s in the final phases of its Fairwater site, which it’s calling the world’s most powerful AI data center, in Mount Pleasant, Wisconsin. The facility could go online as soon as next year.

Microsoft also announced at the time that it’s investing another $4 billion to build a second, similarly sized data center nearby.