According to a White House press release, President Joe Biden is traveling to Racine, Wisconsin today to announce a $3.3 billion investment from Microsoft that will build an AI data center at the same site as the failed Foxconn project.
The Microsoft project, which the White House estimates will create an estimated 2,300 union construction jobs and up to 2,000 permanent jobs, is part of Biden’s Investing in America initiative. Microsoft will implement the investments as part of a “four-part strategy designed to create long-term benefits for the state’s economy and labor market,” the company said in a news release.
Microsoft will also build an AI innovation lab at the University of Wisconsin-Milwaukee and a “data center academy” at Gateway Technical College, where Biden is expected to announce the development, the White House press release said. The academy will train 1,000 people in the community for data center and STEM jobs by 2030. The AI lab aims to work with 270 Wisconsin companies by 2030. Microsoft said it is also working with United Way to train more than 100,000 people across the state in generative AI.
Wisconsinites might be skeptical. In 2017, former President Donald Trump announced that Taiwanese tech giant Foxconn – which makes iPhones, among other things – was building a massive LCD factory in Mount Pleasant, a small town with high unemployment. The company also promised “innovation hubs” in Racine, Eau Claire and Green Bay. Trump said Foxconn’s $10 billion investment, which would create 13,000 new jobs, would be the “eighth wonder of the world.” Most of it never materialized.
The company later scaled back its plans for the factory. As Josh Dzieza reported The edgeThe innovation centers remained empty and Foxconn hired only a few hundred employees, many of whom were later laid off. According to Dzieza’s report, many of the people ultimately hired at Foxconn were hired so that the company could receive a tax subsidy payment from the state of Wisconsin. The state ultimately rejected Foxconn’s subsidy application after discovering that the company only employed 281 contract-eligible people. In the end, Racine was made worse off by the project: To build the factory, the state seized land, including people’s homes, via eminent domain and diverted water from Lake Michigan.
In response to Dzieza’s reporting, then-Foxconn CEO Alan Yeung denied that the buildings were empty. But in an interview in 2022 with decoderYeung – now a professor of entrepreneurship at the University of Wisconsin-Madison – acknowledged that the project was a failure, but emphasized that the buildings were not completely empty. He also denied that the project was undertaken to boost Trump’s re-election chances.
“Any time you put significantly more than $50 million into innovation centers — on top of maintenance and property taxes — you can compare them to Potemkin offices designed to help an incumbent get re-elected. We do not do that; We actually work for our shareholders, and I want to make that clear,” Yeung said. “We had ourselves, our partners and our customers in many buildings,” he later added.
Last August, Foxconn put two of its Wisconsin buildings up for sale.
“President Biden has promised that, unlike his predecessor, he will not leave communities like Racine behind,” the press release said. The announcement is part of Biden’s major manufacturing push ahead of the 2024 election. In February, the administration announced it was investing $5 billion in research to increase domestic semiconductor production as part of the 2022 CHIPS and Science Act. In March, Biden announced $20 billion in CHIPS Act grants and loans for Intel. The White House said the funds would help the company expand its semiconductor production in Arizona and create 10,000 new jobs in the state.