OpenAI, Oracle Announce Michigan Hyperscale Data Center

Michigan is set to become the location of its first hyperscale data center campus, a substantial development unveiled by three major technology companies.
OpenAI, Oracle, and Related Digital have confirmed their joint venture, Stargate, will develop a massive, 1-gigawatt-plus AI computing facility in Saline Township.
This announcement follows closely on the heels of DTE Energy, the local utility, revealing a power provision agreement for a large, previously unnamed data center project.
The utility will supply a significant 1.4 gigawatts of power to the Saline Township campus.

Project Scope and Local Impact

The construction of the expansive data center is scheduled to commence in 2026. Reports indicate the overall value of the computing facility is projected to exceed $7 billion. Michigan Governor Gretchen Whitmer has lauded the initiative, describing it as the largest economic project in the state’s history. The data center is expected to generate over 450 direct onsite jobs, with additional employment opportunities anticipated in Washtenaw County.

The 575-acre site has faced some local resistance, initially resulting in the Saline Township board voting against rezoning the land. Related Digital subsequently filed a successful lawsuit, alleging exclusionary zoning practices. A recent settlement in that legal dispute, combined with the DTE power deal, cleared the path for the official public disclosure. Local officials who initially opposed the plan have become more receptive following the developers’ agreement to invest approximately $14 million into the community and implement concessions like on-site groundwater monitoring wells.

Development and Infrastructure

The data center campus will occupy 250 acres and feature three distinct buildings, each encompassing 550,000 square feet. Company representatives state the cooling of the servers will be managed through a closed-loop system. This technology is claimed to limit the campus’s overall water consumption to levels comparable to a standard office building. Peter Hoeschele, an OpenAI vice president, highlighted that this project will be critical in developing the AI infrastructure necessary to power the next generation of American innovation.

The new facility will be eligible for a state sales and use tax exemption on its equipment, a subsidy approved by the legislature in late 2024. Furthermore, the companies intend to seek a 12-year, 50% local tax abatement package. Providing power to the facility will increase DTE’s overall power demand by about 25%. The utility plans to meet this new load using existing excess grid capacity alongside a massive $2 billion battery facility, which the data center developers will finance.

Wider Implications and Challenges

The announcement comes amidst a broader surge of data center interest across Michigan, driven by recently authorized state tax breaks. Both DTE and Consumers Energy, the state’s two largest utilities, have reported progress on numerous other large data center projects. DTE is in late-stage negotiations for an additional 3 gigawatts of capacity, while Consumers Energy is finalizing deals for three large data centers totaling 2 gigawatts of power. Opponents of these facilities express concern that they could strain Michigan’s energy grid, potentially leading to increased utility rates for existing customers.

Another significant concern involves the utilities’ long-term energy plans to accommodate the rapid rise in demand. Both DTE and Consumers Energy have indicated that their strategies to absorb the new data center load involve building new fossil fuel power plants. Consumers Energy plans to file a long-term plan next year detailing new natural gas capacity, a move which environmental groups are likely to oppose. Though Michigan law counts natural gas plants equipped with carbon capture and storage as clean energy, activists are pushing for stronger clean power commitments to be directly included in the utility contracts.