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Microsoft expands Wisconsin AI data center investment to $7 billion

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Microsoft announced plans to build a second major artificial intelligence data center in Wisconsin, raising its total investment in the state to more than $7 billion. The new $4 billion facility will join a $3.3 billion data center already under construction in Mount Pleasant, Racine County, first unveiled last year.

The initial data center is expected to open in 2026 and employ about 500 people, while the addition of the second will expand staffing to around 800. Microsoft says the combined site will eventually host the world’s most powerful AI supercomputer, linking together hundreds of thousands of Nvidia chips.

The development comes on land once earmarked for Foxconn’s highly publicized $10 billion factory, a project dramatically scaled back after initial political fanfare during Donald Trump’s presidency. When President Joe Biden attended Microsoft’s first announcement last year, he highlighted Foxconn’s retreat as a cautionary tale while framing Microsoft’s plan as a sign of renewed investment.

Microsoft said it will pre-pay for electrical infrastructure to avoid burdening local customers with higher power bills and will use Wisconsin’s cold climate for energy-efficient cooling. Annual water consumption will be capped at roughly the level of an average restaurant. To offset its energy use, the company will also build solar power elsewhere in Wisconsin, though Microsoft President Brad Smith noted new fossil fuel generation—specifically liquefied natural gas—will still be part of the mix.

While the 800 permanent jobs fall short of the thousands promised by Foxconn, Smith emphasized the importance of ongoing skilled labor positions, including pipefitters and electricians, needed for both construction and long-term maintenance.

India downplays Foxconn disruption from Chinese staff pullback

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India’s government said Foxconn’s operations in the country remain largely unaffected despite the company recalling some of its Chinese engineers and technicians in recent months.

S. Krishnan, secretary at the Ministry of Electronics and Information Technology, told reporters in Taipei that Foxconn had managed the adjustment smoothly, relying on staff from Taiwan, the U.S., and local Indian workers to keep production stable. “Operations did not really suffer significantly,” he said.

Foxconn, Apple’s top iPhone assembler, has been expanding in India as part of efforts to diversify production away from China, particularly amid the risk of triple-digit U.S. tariffs on Chinese goods. The company already runs a plant near Chennai and is building another near Bengaluru.

Bloomberg previously reported that hundreds of Chinese employees were asked to return home, though the reasons remain unclear. Both Foxconn and Apple declined to comment.

The backdrop includes lingering India-China tensions since their 2020 border clash, which led New Delhi to tighten restrictions on Chinese firms and ban dozens of Chinese apps. Relations have warmed somewhat, with Indian Prime Minister Narendra Modi meeting President Xi Jinping last month in Beijing for the first time in seven years.

Krishnan emphasized that Foxconn is “committed to see through all the investments in India,” noting its expansion has been “very significant.”

Foxconn Sees AI Driving Growth as Q2 Profit Exceeds Forecast

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Foxconn (2317.TW), the world’s largest iPhone assembler, reported second-quarter net profit of T$44.4 billion ($1.48 billion), surpassing the consensus estimate of T$38.8 billion, as strong demand for AI servers helped offset slower growth in smart electronics. The company on Thursday forecast a significant rise in third-quarter revenue, with AI server sales expected to jump more than 170% year-on-year.

Cloud and networking products, including servers, accounted for 41% of Q2 revenue, while smart consumer electronics contributed 35%. CEO Kathy Yang said, “AI has been the primary growth driver so far this year,” but cautioned that “close attention is needed due to the impact of changes in tariffs and exchange rates.”

Foxconn is increasing capital spending by more than 20% in 2025 to expand server production capacity at its facilities in Texas and Wisconsin. The company’s AI business benefits from rising demand as cloud computing giants such as Amazon (AMZN.O), Microsoft (MSFT.O), and Google (GOOGL.O) expand AI infrastructure.

Geopolitical uncertainty remains a risk, particularly from U.S.-China trade tensions, although a 90-day tariff truce has been extended. While most iPhones for Apple (AAPL.O) are assembled in China, production for the U.S. market has shifted mainly to India. Foxconn is also building factories in Mexico and Texas to manufacture AI servers for Nvidia (NVDA.O).

In its electric vehicle (EV) operations, Foxconn sold its former Lordstown, Ohio, factory for $375 million but will continue to occupy the site to produce cloud-related products. Initial production of its Model C EV for the U.S. market will take place in Taiwan.

Foxconn shares have risen 8.4% year-to-date, outperforming the broader Taiwan index (.TWII), which gained 5.2%, and closed up 0.5% on Thursday ahead of the earnings release.