Panel discussion centers on integrating data centers into state economy

Last week, a panel discussion hosted by the Wisconsin Technology Council focused on how Wisconsin can integrate large-scale data centers into the state’s economy, with participants broadly aligned that the question facing policymakers is how to manage growth, not whether data center development should occur.

The discussion featured Rima Alaily, corporate vice president and general counsel for infrastructure legal affairs at Microsoft; along with Nate Gustafson, R-Omro; and Darrin Madison, D-Milwaukee. The conversation centered on water use, energy costs, workforce development and public trust as Wisconsin considers its role in the rapidly expanding data center and artificial intelligence economy.

Alaily outlined Microsoft’s expanding footprint in southeastern Wisconsin, including a data center under construction in Mount Pleasant, as well as additional planned facilities in the area. She described Microsoft’s investment in Wisconsin as a long-term one.

A central concern raised during the discussion was water use. Alaily said the Mount Pleasant data center will rely on a closed-loop cooling system that recirculates the same cooling fluid rather than continuously drawing fresh water. She estimated the facility will use approximately 2.4 to 2.5 million gallons of water annually, slightly more than the 2.1 million gallons of water the average restaurant uses annually. The limited water use is attributed to advances in cooling technology that significantly decrease ongoing water demand.

Alaily also referenced Microsoft’s Community First AI Infrastructure Initiative, which outlines company commitments related to that water stewardship, electricity costs, workforce training and community investment. She emphasized that those commitments are intended to address concerns raised by residents and policymakers and said accountability is essential.

“It’s critical that we deliver on the promises we make,” Alaily said.

Gustafson, who chairs the Assembly Committee on Science, Technology and AI, described his approach as allowing innovation to lead while remaining prepared to act if needed. He summarized his philosophy as “wait, don’t regulate,” arguing that when companies adopt best practices voluntarily, market pressure can encourage higher standards without immediate statutory mandates.

Madison, the committee’s ranking Democrat, said the responsibility of government is to ensure baseline protections regardless of which company is involved. While acknowledging Microsoft’s approach, he argued that environmental and consumer protections should be codified to hold all companies to a defined standard.

Madison described such measures as “reasonable safeguards to protect future generations,” particularly as data centers place increasing demands on energy and water resources.

Energy costs were a recurring topic throughout the discussion. Alaily described Microsoft’s work with utilities on a proposed Very Large Customer Tariff, an electric rate designed for energy-intensive users such as data centers. We Energies has submitted the proposal to the Public Service Commission of Wisconsin to address the cost of building new power generation and infrastructure needed to support large customers. The proposal is intended to ensure those costs are borne by data center operators rather than passed on to residential ratepayers.

All panelists indicated that protecting ratepayers is a shared priority as Wisconsin prepares for increased electricity demand.

Beyond infrastructure, speakers also emphasized workforce development and broader economic impacts. Alaily said data center construction and operation generate both direct and indirect employment across construction, manufacturing and supply chains. She also pointed to partnerships with technical colleges, including Gateway Technical College, to train workers for data center technician roles that do not require a four-year degree.

Madison highlighted workforce programs aimed at communities that have historically been left out of technology-driven growth, while Gustafson said attracting and retaining talent will be essential as Wisconsin positions itself as a hub for advanced computing and artificial intelligence.

As the discussion concluded, panelists returned to the theme of public trust. All agreed that transparency, community engagement and accountability will play a central role in shaping how residents view data center development as projects move forward.

Rather than framing the issue as a binary choice, the panel repeatedly returned to the same question: How can Wisconsin capture the economic and technological benefits of data centers while mitigating their costs? This signals a shift in the state’s conversation from whether data centers belong in Wisconsin to how they can be responsibly integrated into its economy.