Michigan is facing two challenges: aging water infrastructure and the rapid growth of data centers.
Can its aging water infrastructure keep up with the rapid pace of construction of the state’s AI centers?
According to experts, the data center boom in the state is credited to new state tax breaks and AI development. The MLive article reports that Artificial Intelligence data centers are planned for 16 sites across the state’s 10 counties.
By 2030,, the data center industry is projected to nearly triple, with growth driven by AI and cloud computing, pushing tech companies to build facilities in a frenzy. But this growth is causing concerns from locals who worry about the data center’s impact on the environment (House, 2025).
While several AI data centers are expected to pop up around the state, Michigan’s water infrastructure lags behind. Most of them are over 50 years old and badly need a funding boost to enable long-term management that supports AI expansion success.
ASCE report about Michigan’s Water infrastructure
The American Society of Civil Engineers (ASCE) 2023 report card, issued every four years since 1998, gave Michigan a D+ for drinking water infrastructure, a D for storm water management, and a C for wastewater infrastructure.
ASCE Infrastructure Report Card uses a simple A to F school report card to assess the country’s current infrastructure condition and needs, and provides recommendations for how to improve the 18 infrastructure types or categories.
According to an article in Michigan Public, the state has a water infrastructure spending gap of $860 million to $1.1 billion annually due to deferred maintenance.
The EPA estimates that Michigan needs $6 billion for stormwater infrastructure alone. Michigan’s Clean Water State Revolving Fund helps fund badly needed water infrastructure upgrades by providing loans to municipalities for wastewater and stormwater projects.
In 2024, Michigan’s Department of Environment, Great Lakes, and Energy (EGLE) gave $907.4 million for 34 projects statewide, according to the article.
In addition to funding challenges, the state will have to meet increased water demands from AI data centers, address climate change challenges, including floods, and contend with pushback from concerned citizens who fear the impacts of AI data centers on energy bills, the environment, and pollution.
Data centers consume up to 5 million gallons of water per day to cool their facilities. One reason why data center developers are keen to build in Michigan is the state’s availability of water, a stable energy grid, plenty of rural land, and less vulnerability to natural disasters, said Russell Whipple, the mayor of Mason, south of Lansing (Lincolnhol, 2025).
However, flooding from climate change is a significant threat. Climate change is intensifying storms, and extreme events are becoming more frequent. In the Great Lakes, the total annual precipitation increased by 14%,, stressing the already aging stormwater and sewer systems, which lack the capacity to handle such volumes of water.
Some citizens in Saline Township, about 40 miles southwest of Detroit, and community composed of about 4,000 residents, protested on the construction of AI data centers because they feel that they were railroaded by the whole thing and that the Saline Township board – who initially blocked project of construction three separate 550,000 square feet facilities, meant to be a part of an OpenAI Stargate data center cluster, has now gave a go signal for the project to start, in closed sessions with the developers.
Protesters fear that the economic gains that data center projects offer are short-lived, creating few long-term jobs and causing environmental problems. Additionally, the $7 billion center will raise energy bills, pollute groundwater, and destroy the area’s rural character.
However, in the end, these data centers have enough political support, and while small communities like Saline do not have enough money to contest these giant tech companies.
In response to the protesters’ concerns, DTE Energy, Michigan’s largest electric utility company, and positioning itself as a key enabler of data center growth in Michigan by upgrading grid infrastructure to support the massive power demands from data centers, assures its customers that the data center’s power demands and need for new infrastructure will not increase residential electricity prices.
Michigan stands at a crossroads as it seeks to balance the promise of economic growth from AI data centers with the pressing need to modernize its aging water infrastructure.
Addressing these challenges will require careful investment, community engagement, and planning to ensure that the growth of AI and the expansion of data centers provide long-term benefits to locals and the community while safeguarding the environment.
Sources:
Busse, A. (2026, January 6). Michigan’s aging water infrastructure works to keep up with demand from data centers. Michigan Public. Retrieved from https://www.michiganpublic.org/environment-climate-change/2026-01-06/michigans-aging-water-infrastructure-works-to-keep-up-with-demand-from-data-centers
Larson, L. (2025, December 16). At least 16 sites eyed for data centers in Michigan amid AI boom. Here’s where. M Live. Retrieved from https://www.mlive.com/news/2025/12/at-least-16-sites-eyed-for-data-centers-in-michigan-amid-ai-boom-heres-where.html#:
House, K. (2025, November 19). Data centers eyed in at least 10 Michigan towns. How they might change state. Bridge Michigan. Retrieved from https://bridgemi.com/michigan-environment-watch/data-centers-eyed-in-at-least-10-michigan-towns-how-they-might-change-state/
Dellinger, A. (2025, December 19). OpenAI’s Stargate Data Center Approved in Michigan as American Anger Starts to Boil. Gizmodo. Retrieved from https://gizmodo.com/openais-stargate-data-center-approved-in-michigan-as-american-anger-starts-to-boil-2000701890
Perkins, T. (2025, December 18). ‘Uniquely evil’: Michigan residents fight against a huge data center backed by top tycoons. The Guardian. Retrieved from https://www.theguardian.com/us-news/2025/dec/18/michigan-data-center-fight
Lincolnhol, C. (2025, December 20). Michigan’s water infrastructure sees improvements, work still needs to be done. WCMU Public Media. Retrieved from https://radio.wcmu.org/local-regional-news/2025-12-20/michigans-water-infrastructure-sees-improvements-work-still-needs-to-be-done
Leave a Reply