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Microsoft is putting $3.3 billion toward the construction of a new AI data center in Racine, Wisconsin, on the same land where Foxconn planned to operate a display screen factory before largely abandoning it years ago.
The new data center is expected to create around 2,300 union construction jobs and 2,000 permanent jobs. Microsoft will also establish a "Datacenter academy" in Wisconsin to train 1,000 people in the state for STEM jobs, according to a White House press release. Microsoft will also build a "Co-Innovation Lab" in the state as part of the plans.
"Their training programs will help introduce workers to AI skills and technologies, helping them access and benefit from the AI economy," the White House says.
Microsoft President Brad Smith is expected to officially announce the plans in Wisconsin on Wednesday alongside US President Joe Biden, whose administration is emphasizing former President Donald Trump's failed Foxconn plan.
In 2018, Trump proclaimed that Foxconn's $10 billion Wisconsin factory would be "the eighth wonder of the world." The former Foxconn site was supposed to be home to a 20-million-square-foot factory for television and digital device screens before plans fell apart.
But CNBC reported that Foxconn executives were always unsure about the site's future because necessary suppliers for display manufacturing were far from Wisconsin. By 2021, Foxconn had put over $900 million toward the project, and the state of Wisconsin had spent over $200 million. That year, CNN called Trump's Foxconn project "a collection of mostly empty buildings without any high-tech products to build."
By 2022, Foxconn had hired less than 600 people, and the surrounding town was left "actively marketing an industrial park, hoping to lure large manufacturers," the Wisconsin Examiner reported. Two years later, it's attracted Microsoft, the largest company in the world with a $2.89 trillion market cap at time of writing.
Foxconn, however, tells PCMag in a statement that it's faced "changes in market demand and other challenges" but still has some presence in Wisconsin.
"Foxconn Wisconsin is a key manufacturing site for data servers. Our global market share in servers is approximately 40%. Our Wisconsin operations greatly contributes to that market leadership. We are proud of the over 1,000 men and women who work at Foxconn Wisconsin and help make that happen," the company said in a statement.
Microsoft's AI data center plans aren't surprising considering the tech giant's increasing need for more computing power to fuel its energy-intensive AI projects. While AI's impact on power grids and the climate pose a concern, Microsoft is continuing its massive AI push. This week, Microsoft CTO Kevin Scott emphasized the company's commitment to AI development, writing that the tech giant is building "big supercomputers to train AI models" and has been doing so for the past five years.
"Each supercomputer we build for OpenAI is a lot bigger than the one that preceded it, and each frontier model they train is a lot more powerful than its predecessors," Scott said. "We will continue to be on this path—building increasingly powerful supercomputer [sic] for OpenAI to train the models that will set pace for the whole field—well into the future. There's no end in sight to the increasing impact that our work together will have."
Editors' Note: This story has been updated to include comment from Foxconn.