Microsoft Halts Work on Future Phases of New Wisconsin Data Centers, Second Time Since January 2025

Microsoft has once again hit the pause button on the expansion of its massive data center campus in Mount Pleasant, Wisconsin. As reported by Urban Milwaukee, the tech giant confirmed that while the first phase of the project remains “fully on track” for completion in 2026, work on future phases spanning 900 acres has been temporarily suspended.

This decision marks the second time Microsoft has halted preliminary work on the expansion site since January 2025. The company’s spokesperson emphasized that the $3.3 billion commitment for the initial phase remains intact, with the first data center still expected to go online in 2026 as planned.

Microsoft’s Wisconsin Data Centers

The paused expansion area is located west and northwest of the ongoing construction site, near the intersection of 90th Street and State Highway 195 in Mount Pleasant. Microsoft has not provided specific reasons for the latest work stoppage, leaving room for speculation about the company’s long-term plans for the site.

When the initial pause was announced in January, Microsoft cited the need to “evaluate scope and recent changes in technology” and consider how these factors might impact facility design. This statement suggests that rapid advancements in data center technology and infrastructure may be influencing the company’s approach to future expansions.

Sean Ryan, Communications Director for the Village of Mount Pleasant, assured the public that Microsoft is still meeting its obligations under the agreement with the local government. The first phase of the project is expected to fulfill the $3.3 billion investment promise before the end of 2026, with the resulting property value anticipated to exceed the committed amount.

Ryan also noted that the taxes levied on this property will fully compensate the village and Racine County for the infrastructure investments made to support the project. According to the 2023 agreement between Microsoft and local authorities, the company has until July 2030 to initiate work on the second phase of the project, providing ample time for reevaluation and planning.

This pause in expansion comes amid broader industry trends that suggest a potential slowdown in data center growth. A February report by investment bank TD Cowen indicated that Microsoft might be pulling back from data center expansion on a national scale. The report cited instances of Microsoft canceling leases with third-party data center operators and walking away from several large data center projects in early-stage negotiations.

For the local community in Mount Pleasant and Racine County, the news of the pause may raise concerns about the project’s long-term economic impact. However, local officials remain optimistic, emphasizing that the first phase of the project is proceeding as planned and will deliver significant economic benefits to the area.

As the tech industry continues to evolve, the fate of large-scale data center projects like the one in Mount Pleasant will likely remain subject to periodic reevaluation and adjustment. For now, all eyes will be on the completion of the first phase in 2026 and any signals from Microsoft about its future plans for the expansive Wisconsin campus.