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Michigan Is Latest Battleground in Fight Over Growth of AI Data Centers

By  |  January 20, 2026

Michigan may be in the buckle of the Rust Belt but lately it has become a battleground in the growing fight over powering the next-generation economy.

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    Gov. Gretchen Whitmer (D) has been unabashed in her efforts to steer the state away from its old-economy, wheels-and-steel legacy by aggressively pursuing hyperscale AI infrastructure construction. Last week the Michigan Public Service Commission signed off on a deal with DTE Energy to power a planned 1.4-gigawatt data center being developed by OpenAI and Oracle outside of Ann Arbor.

    “Today, we won the largest economic project in Michigan history,” Whitmer said in a public statement. “I’m grateful to these cutting-edge companies for betting on Michigan, building on our work to compete for and win big projects in next-generation industries from cars and clean energy to semiconductors and batteries.”

    Not everyone in Michigan is as grateful, however. According to MITech News, local residents and environmental advocates have raised concerns about the scale of power and water consumption required by hyperscale facilities, as well as the secrecy surrounding some early negotiations between utilities, developers and regulators.

    “We welcome the technology support and the job creation that data centers and other new employers bring to Michigan, but we cannot welcome them at the behest or the loss of what makes Michigan truly an incredible state, and that is our water,” Secretary of State and now candidate for governor Jocelyn Benson said.

    Related: California Fines S&P Global Under New Data Broker Rules 

    Industry advocates argue that data centers are not isolated projects but foundational infrastructure that will support future innovation across manufacturing, health care, mobility and advanced research, per MITech News.

    “A data center of this scale in our backyard just adds to our assets,” said Phil Santer, COO of Ann Arbor SPARK, a non-profit economic development organization. “We’re thinking about where this can go toward an overall AI strategy for the state.”

    Critics counter that long-term employment at data centers is limited once construction is finished, leaving localities with an environmental and infrastructure burden but fewer economic benefits than AI supports tout.

    The dynamic playing out in Michigan is playing out increasingly around the country as tech companies race to build ever-bigger and more data centers to support their AI ambitions. According to a tally by Heatmap Pro, 25 data center projects around the country were cancelled in 2025 in the face of local opposition, more than four times the number of projects shelve in 2024.

    Of the nearly 1,000 data centers currently planned or under constructure, 99 are being contested by activists and local residents.

    Both Congress and the White House have moved to try to defuse the controversy by seeking to shift more of the infrastructure costs related to AI to the tech companies and developers building them.

    Democratic legislators in Michigan have introduced bills aimed at increasing transparency around energy and water use, limiting nondisclosure agreements, and ensuring residents are not left subsidizing grid upgrades for private facilities, according to MITech News.

    Supporters of the measures say their goal is not to block AI investment outright, but to slow the pace of development enough to ensure public resources are protected and communities have a voice.