I was able to tour the site of Oracle’s new Stargate Data Center in Saline Township, Michigan yesterday.
Couple of observations.
The site is big, but worth noting as the video above does, there is a thousand acres of land in this parcel, and the actual build is 250 acres. The rest is being left as is – some of which will continue to be farmed, I assume as rented land, and some will be left as wetland and wooded land.
“Leave it all as farmland” was not on the table here. The former owners of the site made it clear they were not going to continue farming. This area, close to Ann Arbor and the University of Michigan, and squarely in the southeast Michigan Detroit Metro area, is under immense development pressure, and sprawl is rampant. The other option would very likely be to become a subdivided landscape of boxy MacMansions and concrete, which very often put greater pressure on local services without a commensurate increase in revenues.
Stargate will be paying the full cost for the wires and substations that will connect it to the larger grid. In addition, the project will be purchasing 1.4 gigawatts of battery storage that will be sited around the state, operated by the major utility DTE, and belong to the system and the ratepayer. That spend will provide more than half of the 2500 MW of storage mandated in the State’s climate legislation.
The project will be connected to the grid. On average, systems like DTE’s are utilizing about half of their built generation resources on any given day – the rest is overhead, that ratepayers are paying for, but only maxed out a few hours of the year, generally during the peak times in the hottest days of August.
Bringing in big new users who will soak up that excess capacity during the rest of the year helps amortize the system, and can be a downward pressure on electric rates. DTE has committed to foregoing any new rate requests for at least 2 years.
Cooling will be by closed loop system, so not a big draw on water in the area, in fact, it is claimed, less so than when the land was agricultural.
There will be be 450 people working on the site permanently, more than I thought.
The projected spend on this build is 16 Billion, which would make it the largest construction project in the state’s history, and that figure will certainly grow, perhaps double or more, before the build is over. Immense revenues for local governments, and statewide education programs.
There was a big ceremony the day before, with the Governor and a number of AI luminaries in attendance, including Open AI’s Sam Altman, interviewed below.
Although this project, and likely, a Google project nearby in Wayne County, are happening, this generation of hyper scale builds might not be the template for AI development going forward.
AI Chipmaker NVidia is backing Span, a company that will build distributed Data Centers based on refrigerator sized units, distributed at private homes and businesses across a wide area, giving owners financial incentives to host them, and providing AI Inference services without the expense and timeline of Big Box developments.
All that said, there are plenty of reasons to wonder how much is hype and bubble, and how much is reality. As AI rolls out across various industries, some of the hoped for efficiencies and productivity gains have been found illusory.