Michigan is suddenly facing a backlash against the very data center tax breaks it passed last session, as lawmakers move to repeal sales and use tax exemptions for hyperscale builds.
The trigger is a rush of at least 15 large projects, led by OpenAI/Oracle’s 1.4 GW “Stargate” campus and other plans from Microsoft and Google-linked developers, which could add roughly 5 GW of new load and push peak demand up 39 percent.
Local opposition is strong, with moratoriums, canceled projects, and residents focused on grid strain, water usage, land loss, and the risk of higher rates as utilities build out new infrastructure.
DTE and Consumers see these AI-ready data centers as lucrative long-term power contracts and argue large loads will help spread fixed costs, but critics attack “secret deals,” especially DTE’s proposed 19‑year ex parte power contract for Stargate.
Michigan still has strong fundamentals for AI infrastructure—cool climate, water, and existing grid headroom—but the policy risk around incentives and permitting is now very real.
For operators and vendors planning GPU-heavy builds, this is a reminder that siting strategy must account for local politics and regulatory optics, not just power and tax math.
The article is worth reading for granular detail on how a single flagship AI data center project can reshape a state’s energy, tax, and community debate.
Source: Michigan lawmakers unveil plan to repeal data center tax breaks – Bridge Michigan
