‘This is a time to negotiate’: Recent AI data center deals signal boom for some Wisconsin businesses
Several Wisconsin businesses, including Generac and Modine Manufacturing, have secured significant deals to supply components for AI data centers under development in the state. Analysts suggest Wisconsin is experiencing an economic boom due to these projects, with $46 billion worth of data centers in progress. State leaders are urged to proactively negotiate with hyperscale operators for greater statewide benefits.
Wisconsin businesses are experiencing a significant economic boost from the burgeoning artificial intelligence data center industry, with over $46 billion worth of data centers currently under development in the state. Waukesha-based Generac, a manufacturer of backup generators, announced a deal to supply an unnamed hyperscale data center operator with $650 million for 2027 alone.
Modine Manufacturing, which produces data center cooling systems, secured a $4 billion contract through 2029 for an unnamed data center customer. These deals, alongside work from Milwaukee-based Regal Rexnord, indicate that at least $1 billion in data center-related work has already been completed by these three companies as of March. The stock prices of both Generac and Modine have more than doubled since January, reflecting investor confidence in this new market.
Dijo Alexander, a professor at UW-Milwaukee's Lubar College of Business, highlights Wisconsin's central geographic location as a key advantage, facilitating the rapid movement of digital information across the country. This proximity allows local companies to participate in early discussions and expand globally. However, Tom Kertscher, a reporter with Wisconsin Watch, questions whether the jobs created by supplying data center components will be long-lasting compared to short-term construction roles.
Alexander advises state leaders to adopt a more proactive and unified approach to negotiations with hyperscale companies, rather than leaving it to individual communities. He emphasizes that data centers require state resources like water, land, power grids, and workers, and in return offer investment, research partnerships, and supply chain demand. This suggests a need for strategic engagement to ensure Wisconsin maximizes its benefits from the data center boom.