The Fight Over Data Centers is Heating Up — in Michigan and the United States

The data center build out, and the subsidies underpinning it, are becoming hot-button issues in key races.

Credit: iStock/Gerville

By Ashley Nowicki, Policy Analyst

Data centers are popping up throughout the country — including in my home state of Michigan. As of December, there were at least 16 in the works, with MLive dubbing 2025 “the year of the data center” for the state. Nationwide, data centers have grown at least 150% between 2010 and 2025.

But this isn’t inevitable — or happening solely because companies are pushing to build them in their race for artificial intelligence (AI) dominance. Instead, Michigan lawmakers — along with a majority of other states — are accelerating this trend, offering billions of dollars in tax breaks to incentivize technology and utility monopolies to build large data centers.

These tax breaks impose significant costs on the community, and Michiganders are fighting back. According to Howell, Michigan board member Tim Boal, Michiganders backlash to data centers is something he’s “never seen before.” Will this anger change policy, or will lawmakers in the state continue to unfairly prioritize big money interests over their other constituents?

Michiganders Across the Political Spectrum Are Enraged

Despite how Michigan politicians or companies feel about these tax breaks and the boon in data centers, Michiganders appear less than thrilled. In the past few months alone, a number of data center projects have been proposed across the state, with residents across the political spectrum showing up at company headquarters, the state capitol, town halls, and even participating in planning commission and utility commission meetings to express their opposition to them. Already, 19 local governments across the state have proposed or approved data center moratoriums following community backlash.

Residents say they are concerned about water and electricity usage, utility prices, noise, and environmental pollution, particularly to our Great Lakes — with many calling for a statewide moratorium on data centers. At the same time, energy use from these data centers is often hidden from the public, allowing powerful corporations to shift costs onto the public while they reap private gains. One resident said “we need our government to crack down on these companies… [and stop them] from steamrolling small towns… that can’t defend themselves…”

A fight over a data center in Saline Township, in Washtenaw County, Michigan, is telling of the political moment we are in. In October 2025, Governor Whitmer announced that OpenAI, Oracle, and Related Digital would build a multi-billion-dollar data center in Saline Township — with a promise of creating over 4,000 jobs. But residents were unimpressed and pushed back against the proposal, raising concerns over water, energy, and land use, along with a concern that it would raise utility prices or cause pollution.

Initially, the Saline Township Board of Trustees sided with residents, voting against a rezoning proposal — something, without which, the data center couldn’t be constructed. But Sam Altman (OpenAI), Larry Ellison (Oracle), DTE Energy, Stephen Ross (Related Digital), Gov. Whitmer and the Trump administration pushed back even harder. Two days after the boards decision, Related Digital sued the township. What happened next is surprising to no one in our age of big corporate power. Saline quickly settled the suit — which allowed the data center to be built despite what the land is zoned for — and DTE then asked the Michigan Public Service Commission — the state regulatory agency that is charged with “serv[ing] the public by ensuring safe, reliable, and accessible energy and telecommunications services at reasonable rates” — to fast-track the data centers approval, bypassing the will of Saline townships board, the community, and the public comment process. MSPC, whose members are appointed by the governor, ultimately sided with DTE. Notably, the Governor submitted a letter in support of the project to MSPC, claiming “if we do not act, it will cost us thousands of jobs and billions of dollars of investment in our economy” despite evidence to the contrary. The data center is expected to be online as early as 2027.

It’s quite possible these data centers will not improve the economic situation in Michigan, and instead do the opposite. Michiganders already pay one of the highest utility prices in the Midwest. And when data centers are built, demand increases, and utility companies pass costs along communities through higher utility prices. Nationwide, data centers accounted for over 4% of total electricity consumption in 2023, and this is expected to grow to 12% by 2028. At the same time, electricity prices are up almost 300% in areas near data centers, and rising twice as fast as inflation. Moreover, it is no secret that companies and investors want to have productivity without “the tax of human labor,” replacing workers with AI. By incentivizing the creation of data centers for AI, Michigan lawmakers may be accelerating job losses among their constituents, rather than creating new jobs or protecting current ones.

The Great Lakes State, Corporate Giveaways, and Data Centers

Something to note: Michigan has a long history of granting corporate subsidies. No matter which party controls the governor’s mansion and the state legislature, lawmakers implement programs that save companies millions or billions of dollars, with the companies that benefit promising vague economic growth in exchange.

In reality, these subsidies are often ineffective, hardly providing tangible benefits to the public. Instead, they result in lost revenue that could have been reinvested into improving people’s lives. According to the Mackinac Center for Public Policy, between 2000 and 2020, subsidy programs have cost the state at least $24 billion. In return, these programs have delivered only 9% of the promised job creation.

Data centers promise more of the same.

In 2015, then Michigan Governor Rick Snyder (R) signed two bills into law that gave companies a sales and use tax break through 2035 to create small, shareable data centers — facilities that store, process, and distribute online data and applications. These laws required companies to create 400 and 1,000 jobs by 2022 and 2026 respectively. If they didn’t, the tax breaks would end. A number of companies failed to create the expected jobs by the first deadline, including Switch, a Nevada-based storage company for which the law was enacted. It created only 26 jobs after promising 1,000. Instead of revoking these tax breaks, the Michigan Economic Development Corporation — a public-private partnership that “fosters the growth of [] communities across the state” — loosened the definition of a “full-time job”. At the same time, Switch saved an estimated $1 million a year in tax breaks, with the state having no ability to claw back the money, and residents and small businesses saw water prices increase the years that followed.

Fast forward 10 years. Despite a history of broken promises and failed results, Governor Gretchen Whitmer (D) signed two bills into law in 2025 that extended and expanded these giveaways. Now, big technology and utility monopolies — including Meta, Google, OpenAI, DTE Energy, and Consumers Energy — are also incentivized to build “hyperscale” data centers in the state.

Clearly, the state did not learn its lesson. In exchange for tax breaks that last until 2050 or 2065, the companies are now only required to create 30 full-time positions. That’s right. Not even three dozen jobs. Nonetheless, Governor Whitmer claims these laws will “attract[] investments to create jobs and lower costs across” the state.

The local and nationwide evidence, however, demonstrates no such thing.

One study on states that provide data center tax incentives suggests that these tax breaks do not result in technology sector job growth but instead “lead to annual savings in the millions of dollars” for the data centers themselves. A report from the University of Michigan — with an emphasis on the state — notes that, at best, data centers across the country bring very few local jobs — and that they are often part-time or temporary ones related to the construction of the centers themselves. The jobs that remain post-construction are often contracted work for “low-wage, … non-technical positions”.

In reality, the real winners are big tech and utility monopolies that partner to build and operate these data centers. Data centers in Michigan give the two utility companies DTE and Consumers Energy guaranteed demand, investment, and ultimately profit, while companies like Google and Meta can lock in stable, lower prices to store and use energy. With increased demand, utility companies are using this moment to upgrade infrastructure, since they “don’t make profit on making the grid more efficient”, passing those costs onto residents and small businesses instead of the data center owner or user. Utility companies then lobby state legislatures and regulators to raise electricity rates to lower their own costs and boost profits.

While it is true data centers have been around for decades and serve important purposes — including for core business functions for governments, universities, and large corporations along with the internet — states do not need to give up valuable resources to incentivize more of them.

Community Outrage Appears to Push Lawmakers and Hopeful Candidates to Act

These fights in Michigan are emblematic of a larger political fight playing out across the country. According to Data Center Watch, nearly $100 billion — or 70% — of planned data center development for AI was blocked or delayed due to local opposition between March and June of 2025. This is the highest recorded opposition since the group began tracking in 2023.

In Michigan, legislators are beginning to push back. A bipartisan group recently introduced legislation to repeal tax breaks for data center developers. Representative Dylan Wegela, a Democratic Socialist, Representative Erin Byrnes, a Democrat, and Representative Jim DeSana, a Republican, joined together to roll back this legislation, as “data centers produce few jobs, raise utility rates, and put a major strain on [] energy resources.” Each member represents a city that voted for Trump in the last election, and despite their differences, these members understand their constituents’ anger, as “big corporations and utilities have taken from our [state] while giving nothing back.” And Representative Jennifer Wortz, a Republican, has promised to introduce legislation to impose a one year, statewide ban on data centers.

Corporate giveaways for data centers are also becoming a hot-button issue for the Senate Primary in Michigan.

For the Democrats, Dr. Abdul El-Sayed, a former physician and public health professional turned politician, laid out a list of policies that he would adopt if elected to protect Michiganders and their communities when data centers come to town, including requiring data centers to pay for their own energy use, job guarantees, project transparency, and protecting our water. (Disclaimer: I have volunteered for El-Sayed’s campaign.) Representative Haley Stevens, in turn, has said “innovators need certainty to succeed. AI and data infrastructure require a clear, responsible policy framework” ensuring that AI enables “greater productivity” while taxpayers are protected from “increased costs.” However, Stevens track record in Congress suggests she generally supports targeted tax breaks and credits for particular industries. One candidate who’s so far tried to remain above the fray: State Senator Mallory McMorrow. She is currently the Chair for the Michigan State Senate’s Committee on Economic and Community Development. In this role, McMorrow will be able to advance, or kill the bipartisan legislation to repeal these data center tax breaks. Her record is not encouraging. She’s supported 100% of business subsidies that she has voted on since taking office — including the tax breaks for data centers that passed in 2024. And recently, she told Gander Newsroom that “when it comes to data centers, Michigan can show the rest of the country how to do this the right way… we won’t settle for … innovation or protecting our environment — we can, and will, do both.”

For Republican candidates, It is unclear what the Republican Senate candidate Mike Rogers (R) — the presumed frontrunner — thinks about data centers, as he has taken no public stance.

And for gubernatorial candidates, data centers have become a key talking point, with a mixed reaction towards data centers. Current Secretary of State Jocelyn Benson (D) said the state should require facilities “limit water use” and “drive down energy costs”, and vowed to ban any data center that uses state water or raise electricity bills. Notably, her husband is the VP of Related Companies, Related Digital’s parent company. Mike Duggan (I), former Detroit Mayor, wants to implement a statewide standard, with a focus on “sustainable water management” and “protections against electricity rate increases” while also citing data centers as economic development. John James (R) called the current approach “crazy” and wants guardrails to make sure data centers do not raise prices on utilities. And Tom Leonard (R) wants to repeal the current tax breaks and impose a moratorium on data center development “because people are fed up”.

With the new legislative sessions underway, Michigan lawmakers can and should exercise their authority to roll back these initiatives. And given the growing public opposition to data centers — particularly in the Great Lakes State — Michiganders should keep a close eye on what their state representatives, Senate Primary candidates, and gubernatorial candidates not just say (or perhaps not say) but what they do when it comes to confronting the corporate power pushing for data center subsidies. As my colleage, Pat Garofalo correctly previewed, 2026 is the year for politicans to “stand[] against these projects and their downstream effects.”