Michigan lawmakers are moving to repeal sales and use tax breaks for hyperscale data centers, directly targeting incentives that helped attract at least 15 large projects.
The trigger is the $7 billion, 1.4 GW “Stargate” site backed by OpenAI, Oracle, and Related Digital, plus several Microsoft and Google-linked builds, which together could drive a 39 percent jump in Michigan’s peak power demand.
Opposition centers on grid strain, higher utility costs, water use, and land loss, while utilities like DTE and Consumers see lucrative multi-decade power contracts and argue that large loads can spread fixed costs and lower rates.
DTE is seeking ex parte approval for a 19-year PPA for Stargate, claiming $300 million in annual savings for other customers, while keeping full contract terms nonpublic and warning the project can be cancelled if power is not secured by Dec. 19.
Local pushback has already shelved projects in multiple townships and triggered moratoriums, underscoring how siting and community acceptance are now core risks for AI-scale data center rollouts.
Michigan still has strong fundamentals for AI infrastructure builds—cool climate, water, and existing grid headroom—but the political and regulatory environment is clearly in flux.
The article is worth reading to understand how incentives, utility strategy, and local resistance are reshaping where GPU-heavy hyperscale capacity will actually land.
Source: Michigan lawmakers unveil plan to repeal data center tax breaks – Bridge Michigan
