Microsoft CEO Satya Nadella speaks during the Future Decoded Tech Summit in Bengaluru, India, on Feb. 25, 2020. Microsoft will open a new data-center region in Spain, expanding their strategic partnership with Telefonica SA, according the the statement by Telefonica.
Samyukta Lakshmi | Bloomberg | Getty Images
Microsoft has identified itself as the mystery company behind a prospective data center in a part of Michigan where locals have objected to such a development.
On Wednesday, Microsoft’s cloud infrastructure team was named in a letter, published by Lowell Charter Township, as the party eyeing a 237-acre lot beside Interstate 96. The township, with a population of around 6,500, is located 20 miles southeast of Grand Rapids.
The letter came after weeks of speculation about who was collaborating with developer Franklin Partners for the controversial project. Franklin, based in Illinois, had previously said it was working with a national company based in the U.S. to build a data center on the land.
In December, locals crowded into a planning commission meeting, where a public hearing on the proposed rezoning was on the agenda, leading to the postponement of the event. News outlet MLive reported that a Grand Rapids business owner appeared in a Mr. Peanut costume and held up a sign saying “This is nuts.”
Some in the area have said the township was moving too quickly to rezone the land, given the absence of clarity surrounding issues like energy requirements to operate the facility. Days after the canceled meeting, local officials said they were temporarily holding off on moving forward with the project.
“We are introducing ourselves now because we have observed that the community would like more information about the proposal, and we believe it is important to be transparent about our intentions moving forward,” Microsoft said in Wednesday’s letter. “We asked the seller to pause the rezone process so that we could spend time with the community early this year and share more about our potential long-term plans before we proceed.”
Microsoft is set to nearly double the size of its data center portfolio in the next two years, CEO Satya Nadella told analysts in October. It’s among a group of industry heavyweights, including Amazon, Google, Meta, Oracle, OpenAI and Elon Musk’s xAI, rushing to spin up data centers packed with Nvidia’s graphics processing units and other infrastructure needed to run powerful artificial intelligence models and workloads.
Tech’s megacaps are collectively committing hundreds of billions of dollars a year to capital expenditures, raising concerns that they’re fueling another industry bubble.
Utilities in some U.S. markets have said they won’t be able to supply the energy needed for these planned data centers, which has made site selection more difficult. Residents living near the sites of proposed facilities have been pushing back, citing a range of concerns.
Water use is one of the key issues. The Michigan township said it has an agreement with the nearby city of Lowell to provide a path for increased “capacity of the plant at no additional cost to rate payers.” Consumers Energy, a utility serving millions of Michiganders, has said data centers will not lead to higher electricity rates.
The lot in the Covenant Business Park in the township is zoned as industrial planned unit development, and has sat empty, in part because of a lack of water and sewer services. The township’s board would have to approve to change the zoning to light industrial for the project to advance.
The development would result in $500 million to $1 billion in investment over the course of three to five years, the township said.
The planning commission is set to meet again on Jan. 12.
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